expand airbnb property management service

How to grow your short-term rental management business: our top tips

You’ve recently launched your short-term rental management business, with or without professional assistance. At a time when the sector is booming and property manager activity is becoming increasingly professionalised, it is essential to build a strong roadmap to boost your business. You’ll need certain skills to expand airbnb property management service : from defining your goals to tracking key indicators, among other important elements.

You’ve embarked on the exciting journey of short and mid-term rentals and you’re seeking professional advice to assist you in your business? You’ve come to the right place! RentalReady is the Property Manager Software (PMS) developed by GuestReady, a leading property manager company. Therefore, we’re well-positioned to provide you with the best advice on short and mid-term rental business management and assist you in its day-to-day challenges.

In 2022, the French network of rental management companies, Réseau des Conciergeries Locatives de France, estimated that there were 5,000 short and mid-term rental management companies in France. The sector has been expanding rapidly in recent years, and competition is becoming fierce. Therefore, it is essential to offer quality services to carve out your space and keep your customers satisfied.

Why build a roadmap for short and mid-term rental management business to expand airbnb property management service ?

You’ve launched your short and mid-term rental management business, and that’s already a significant step ! Especially in an industry that is increasingly professionalising. But to develop your business further, it’s now time to establish a roadmap. It’s a way of setting objectives for you to achieve. By putting these objectives on paper, you’ll have a process to follow as you develop and grow your short-term rental management business. 

When you create your roadmap, there are different elements to consider. First is the financial aspect, as your short and mid-term rental business needs to be profitable to thrive in the long term. But also, set quality objectives to retain your existing clients and expand your customer portfolio.

Setting up your short and mid-term rental management business involves several steps. 

It’s a mistake to think that creating a short and mid-term rental management business is easy and quick. It’s essential to conduct market research and create a business plan beforehand. Having a real roadmap is an asset: it reassures your partners, such as investors who may be willing to support your business, whether at launch or during an expansion project.

What tools do I need to create a business plan?

Creating a business plan isn’t instinctive for everyone. Unless you’ve undergone specific training to become a property manager, you’ll likely be embarking on this project alone. Fortunately, with the right tools, crafting a proper business plan for your short and mid-term rental management business is easier than it seems!

  • Coggle allows you to create a visual mind map to organise your ideas and goals;
  • Excel (or Google Sheets) enables you to create financial tables;
  • QuickBooks is a comprehensive online accounting software that helps you calculate your financial forecasts;
  • Canva helps you present your business plan in a professional way, with customisable templates to match your brand identity.

How to define your financial objectives

expand airbnb property management service with business plan
Expand airbnb property management service is possible with a good business plan

Setting your prices is often complex. You need to remain competitive and profitable at the same time. Many short and mid-term rental management businesses in the early stages don’t know how to define their financial goals and set appropriate rates.

In general, short-term rental management services charge fees based on a percentage of rental income. This figure typically ranges between 15 and 30% for companies in France. 

The most common fees include a percentage of rental income + cleaning fees.

Short-term rental management rates generally fall into two categories:

1. A rate for specific services: Cleaning, key exchange, and inventory checks are delegated by property owners to a property manager. These services are charged on demand.

2. An “all-inclusive” package: More lucrative, these are packages that combine multiple services for a single fee. The property manager earns a 20% commission (average observed in recent years) on the seasonal rental income.

When setting your rates, it’s also important to consider those practiced by your competitors. During your market research, you must have observed their pricing. This is a good indicator to determine where you stand.

You should also consider your positioning: are you aiming for budget, mid-range, or high-end services? This positioning is essential for defining relevant financial objectives. That’s a good way to expand airbnb property management service.

Tip: When starting your business, it’s common to adjust your rates after a few months of activity. Don’t hesitate to do so if necessary.

To help you define your professional objectives, don’t hesitate to rely on tools like PriceLabs and Beyond. They make it easier to study your market.

Using the information you have gathered (type of property, average length of stay, occupancy rate, service fees, etc.), you can set an annual revenue target you want to achieve. Once this revenue target is set, you need to deduce the seasonal rental scheme required to reach it. This could be : 

  • X 2-bedroom flats
  • X 3-bedroom flats
  • X villas

How to set quality objectives

To attract clients and ensure your business is appealing, it’s essential to set yourself quality objectives.

To do this, you should track and monitor certain indicators and regularly assess your performance to ensure you remain competitive.

Guests’ reviews

When managing short-term rentals, guests’ reviews are crucial. They are regularly consulted by other travellers and are a key factor in your bookings. They play a major role in both the reputation of a property and a business.

It’s essential to gather as many positive reviews as possible to maintain a high-quality image. You need to manage your online reputation. Respond to negative reviews in a structured and polite manner. Listening skills and responsiveness are essential for maintaining a positive image.

Quality cleaning

Many property owners rely on property management companies for cleaning services. Therefore, it’s crucial to ensure impeccable cleaning in the accommodations you manage. Make sure to partner with reliable service providers who deliver impeccable cleaning services.

Property owners’ reviews

Regularly touch base with property owners. Take the time to gather their feedback on your services so you can make any necessary adjustments. Conducting regular assessments demonstrates your professionalism and also helps you gauge customer satisfaction. This last point is crucial to expand airbnb property management service and attract new clients.

What mistakes to avoid when you expand airbnb property management service? 

expand airbnb property management service easily
It is necessary to avoid some mistakes to expand airbnb property management service

We learn from our mistakes, but sometimes they can be painful and slow down your business considerably. That’s why we’re sharing some tips gathered from experienced property managers.

Mistake #1: not doing enough market research

We mentioned it earlier in this article, but it’s essential to carry out market research when starting out this business.

Having a good feeling about it is one thing. Seeing that there are already property manager companies operating in your area is also important because it means there’s demand. But you can’t rely solely on that for your business.

What are the results of your competitors? Are they seeing returns on their investment? You should know that there are now very affordable solutions (both financially and technically) for carrying out effective and reliable market research. To name just a few, PriceLabs and Beyond both offer features to analyse in detail a market’s past performance.

Mistake #2: not clearly defining your business model

As in any profession, it’s difficult to know in advance what the fixed costs of your business will be. Fortunately, there are associations such as CLF and events such as Scale France where you can meet other managers and learn about best practices, exchange ideas about your profession, etc.

When you’re looking to grow your short-term rental management business, it’s easy to anticipate that you’ll need to use a PMS (or a Channel Manager) to facilitate day-to-day management. However, depending on the area you’ll operate in, you may need to implement a dynamic strategy to ensure the profitability of the properties. You could, for example, set up a subscription for the solutions mentioned above. Keep track of all the subscriptions you need for your future business and think carefully about your business model.

If you only manage lettings during the summer, how will you cover your expenses in the low season? Don’t hesitate to contact the CLF network and RentalReady to find out how to prepare for the low season. Perhaps, like some, you could consider a hybrid business model, with a low fixed subscription fee and a commission.

Mistake #3: Not imposing your rules

As a property manager, you are a short-term rental professional.

There’s nothing worse than being in a situation where it’s the property owners who decide everything:

  • the prices to be applied;
  • the platforms on which to list the property;
  • the guests to accept;
  • the minimum nights to enforce.

Indeed, such situations do exist ! But remember, you are the professional. It’s up to you to present your working method to the property owners. Although it might be daunting, saying no to an owner who wants to impose everything on you is a good thing to save yourself serious trouble in the long run.

Conclusion

We hope you find these tips useful as you grow your short-term rental management business. At RentalReady, we often participate in events dedicated to holiday rental professionals. Feel free to attend these events and meet us in person !