Take a Risk

One of our past assignments was on the island of Virgin Gorda in the British Virgin Islands. We were hired to review several properties that were involved in the short term rental market. The property management team was looking for some objective suggestions to provide to the owners that could help them put their properties in a better position to generate additional rental revenue.

Inspect Your Inventory

We inspected the entire inventory and provided a complete report of our findings and recommendations for each owner. The property management team was delighted to have our voice be heard as owners often get very sensitive about any type of information of this nature. The property managers have learned over the years that in the event they’re too honest the owners will be offended and release them of their responsibility. This way they protected themselves for any type of push back.

Interestingly enough, our findings reflected the exact thoughts of the property managers, but they could not seem to delicately express this information in such a manner to get the owners to listen. Our core belief is it is a responsibility of those in charge of promoting short term rentals or sales to stick their necks out and be known to take risks by being totally honest.

Provide Honest Reports

Owners hire representatives to provide them with the services of generating the most rental revenue or highest selling price. They may not always like what they’re being told, but if you can back it up with results they will respect you. Managing expectations by being clear is best from the beginning. Putting suggestions in writing also provides a document to refer to at a later date. Also, suggest documenting when and if an owner implemented the changes that were recommended.

In our report, we had a long list of suggestions for each owner along with an estimated cost of each suggestion. The balance is each owner had to decide what investments were worth it to generate more rental revenue and how long it would take to get a return on their investment. We also pointed out that a property that generated a continuously high level of rental revenue also had additional value when they were ready to sell. Potential buyers review the initial cost of a property, but also the operating costs. If a villa can generate a reasonable historical record of rental earnings the new owner can then manage their expectations of offsetting the operating expenses with short term rentals. Then the risk of ownership becomes less.

Low-Cost Solutions to Increase Sales

Below are some of the very basic recommendations that required little investment:

1. A fresh coat of paint in many of the rooms and exterior - amazing how refreshing and inviting a property is when it has a fresh coat of paint.

2. High-quality bed coverings and linens. Guests do not want to see tired and worn out bed linens

3. Bright white clean bathroom towels and washcloths. Guests want to have a feeling the bathrooms are clean and sparkling.

4. Comfortable mattress - if a guest does not sleep well they will be grumpy and not be in a good mood during their stay. Kingsize beds are preferred with the option of some of the kings being able to convert to twins as needed.

5. Nicely landscaped that is well taken care of with no items just lying around and not put away

6. Plenty of kitchenware and utensils.

7. Tableware should not be a mix match of all different styles.

8. Plenty of outdoor lighting

9. Competitively priced in the market place. A complete study of all available rentals should be done to provide how to best position each property.

10. The owner should provide breakdown rates which mean the renters are provided pricing for only the bedrooms they use. This allows a larger villa to compete with the smaller bedroom category. Keeping in mind the average villa that is rented is 2.3 bedrooms. A four-bedroom could offer a 2 or 3 bedroom rate and then be able to attract the potential renters only looking to rent 2 or 3 bedrooms.

No matter what the business is it is important to be idea-centered. if you're responsible for generating real estate sales or short term rentals, it is imperative to practice regularly a kind of analysis entirely different from the kind you might be doing now. Most companies have a tendency to look regularly inward within their own category. If you wish to gain a genuine competitive advantage you should be looking outward. Take some risks.