5 Things I've Learned in 3 Years of Owning a Short Term Rental
In March 2022 it will have been 3 years since my husband and I made the jump to purchase a second home for the sole purpose of creating our own side hustle. I was restless in my Corporate Finance job, and I knew that “generational wealth” wasn’t going to be created through our steady dual incomes. AirBnBs had obviously been around for a while, but the opportunity was only expanding, particularly in the Mt Washington Valley where we decided to target our focus. The pandemic only accelerated growth, especially for residents in the New England area looking for respite from the monotony of being homebound.
Since we closed on our first cabin in 2019, we’ve purchased a second in 2021. I have so many ideas swirling in my head as to how we can make our AirBnBs different and stand out, but it’s been difficult to execute on with a full time job, a newly diagnosed Type 1 diabetes child, and another baby on the way. That said – I’m hoping the next few years are different. Here are 5 takeaways for our first 3 years in operation, and here’s to 30 more.
Don’t take reviews personally. You need them to get better. This is true for all small businesses, not just Airbnbs. Reviews revealed to me things that are going on that I would otherwise not be fully aware of - a kitchen not stocked properly, an ugly landscaping job, stray cobwebs. Put your big kid shoes on and don’t be afraid to read them. This took me almost a year to come to grips with.
That said - don’t bend where it doesn’t make sense. Cancellations in particular are the toughest to make a call on - I’m a softie when it comes to life happening outside of our control, and in my first couple of years I refunded every excuse under the sun. Once you realize how much last minute refunds are killing your income when you have a clear and firm cancellation policy, it becomes easier to be kind but firm. Yes, life happens, but I’m not responsible for the impending blizzard of 2022. I have to support my business responsibly.
Perfection takes time. On both cabins, I rushed them to market with cheap furnishings and design. I’ve been slowly replacing items and refinishing the cabins to get to the luxurious feel I want them to have, but it takes years, not months, to finish, especially if you need the rental income to fund projects. Be patient. We are never finished, and that’s part of the fun.
Automate everything you can - ordering supplies, messaging guests, scheduling cleans, check-in and check-out. AirBnB has come out with a ton of new features in the past year alone to make property management as easy as possible. It takes a bit of time up front, but it’s so worth it.
The short term rental play isn’t for the faint of heart, but it’s not a massive bet either. We were pretty scared in March of 2020 that we wouldn’t be able to cover our costs again, but the pandemic and economic volatility has played in our favor. If managed correctly, AirBnBs can have limited downside in a down market, and moderate to good upside in a roaring market. Our financial modeling and scenario planning has come in very handy here.
That’s it! If you’re thinking about jumping in to the Short Term Rental business, drop me a note.