“The Dream” has come true: You’ve purchased a vacation rental on Maui, which is now your second home. You are beyond ecstatic — but to stay afloat and cover your overhead expenses, you have to rent it out to vacationing guests.
- How much time away from family will this cost?
- Can you truly maximize your earning potential?
- Do you really save money by managing this on your own?
Consider these scenarios
OWNER 1 (Owner-managing)
- Your rental made $35K per year
- Total expenses $20K
- You made $15K
- Your rental has the capacity to earn $45K per year
- Management commission $10K
- Total expenses $20K
- You made $15K
Yes, OWNER 1 made as much as OWNER 2 and didn’t pay a management fee, but OWNER 1 also didn’t maximize the unit’s earning potential. Also, OWNER 1, paid with additional time, energy and hassle.
You need a network
Managing a vacation rental is more complex and requires more commitment than you think. As an owner, you need to think and act like a fully-functioning property management team: marketing, booking, assisting, cleaning, repairs and more.
To welcome travelers, your vacation home/condo needs to be in top shape at all times. Without all maintenance and repairs addressed, you can easily lose time, money and potential revenue and guest happiness.
Property managers have a network of skilled people they call on for any type of repair. These are usually established relationships with reasonable fees and lower wait times.
Dealing with instant gratification
Instant gratification is today’s service standard. How would you deal with these issues?
- An 11pm email from your guests with questions regarding their plans for tomorrow morning
- Your guest loses their key just as you’re just going to bed
- A plumbing emergency on a holiday weekend
Are you prepared to handle these kinds of requests? Are you nearby?
Can you make emergency purchases? If you plan on a busy operation, items will need to be replenished often due to normal wear and tear.
The expectation of a vacation property manager is 24/7 availability. Calls range from general inquiries, miscellaneous issues, noise complaints and unruly guests disturbing the neighbors.
Following up and addressing these issues promptly are an absolute necessity, and will help maintaining good relations with your neighbors, the complex and the association (if it’s a condo).
Can you build a team?
Let’s say you were referred to a housekeeping contractor by a fellow owner. How do you verify if their work is impeccable? If there aren’t quality checks in place, you may only find out from a negative guest review if the service is unsatisfactory.
Or what if your regular housekeeper doesn’t show up on time and your guest is scheduled to arrive—what do you do? Might you find out from your guest if they’ve checked into a dirty unit?
What kind of added-value benefits can you provide your guests? It’s certainly helpful if you’re friendly, enjoy assisting people and love sharing your island knowledge, but are you able to offer your guests any additional services beyond personal insight and experience?
Property management companies generally offer discounted car rental, travel insurance, concierge services, grocery deliveries, baby gear rental and more.
Facing competition
Vacation rental guests are sophisticated travelers with expectations. It is no longer the weekend trip to the lake house with the kids. Travelers nowadays have experience with the hotel and resort scene and have turned to vacation rentals to enjoy more space, privacy, a kitchen and the chance to “live like a local.”
These kind of travelers have high expectations, which stiffens the competition. You may find yourself up against vacation rentals that entice these travelers by offering hotel-level services, like a private concierge.
How’s your sales and marketing?
Effective marketing and sales combined with quick lead follow-up are also keys to vacation rental success. The Internet offers several viable options for owners to list and manage their own units. This also means an influx of new units listed in the same market share as you.
Being able to watch the market and adjust your rates accordingly and on the fly is a must. This is how you capture larger market share and bring in more revenue. Poorly priced units can sit empty and you know that means — no money!
The bottom line
If you want vacation rental success, you’ll need to offer exceptional service at all times in order to meet and beat your competition.
If you decide to sell your property, you can net a high valuation if it can demonstrate a consistent, solid rental record with high occupancies and strong rental income.
Of course we have seen owners — often industry professionals —, live in the same town as the rental, are well connected and do a great job of managing without extra help. This is not your typical scenario, but we’re not going to deny it exists.
If we can address any of your vacation rental / property management needs in South Maui, please contact Sunny Maui Condos. It would be our pleasure to assist you. info@sunnymauincondos.com or 808-240-1311 Ext. 61 (Owner Services).
We would be delighted to be part of your next Maui vacation. If we can assist you with planning your perfect Maui vacation, please contact our Sunny Maui Vacations’ team at info@sunnymauivacations.com or at 808-240-1311 Extension 21. Let us help you reserve your vacation rental condo in South Maui and assist you with island recommendations and activity planning through our in-house Concierge at 808-240-1311 Extension 71.
Image credit: Airbnb
Need a hand with your next Maui vacation? Please contact the Sunny Maui Vacations team at info@sunnymauivacations.com or call 808-240-1311, ext. 21. We’ll find you the best vacation rental condo or rental home in South Maui and help you with any and all recommendations and activities across Maui.
