We had a two-unit upper/lower unit in Hamtramck that always rented to polish folks in the neighborhood. For as long as I can remember Hamtramck was primarily a polish immigrant community. My tenants could not speak English, and even though I am Polish, I can not speak Polish, which made our monthly collections interesting. The tenants always demanded that I pick up the rent from them in person. While picking up the rent they insisted that I sit and have a few drinks with them. They did not use the phone or the mail. Everything was going great until the neighborhood started to change… and my tenants moved out to the suburbs. The neighborhood changed dramatically and now our new tenants were not too keen on paying us on time… ever. As the house sat vacant between tenants we were greeted with a handful of squatters. To say it nicely, it all went to hell in a hand basket.
Even if you think you have a good thing going, sooner or later your “great” tenants move on with their life and you are left renting to the leftovers… bring on the headaches!
Just one of many reasons I got out of the traditional single-family rental business. Go vacation rentals! In this Blog I will introduce you to the 2nd of the 4 keys to success with vacation rentals Part 1
Key #2: Repeat Renters.
I am a member of an online vacation rental owner message board. It floors me what a lot of the people post and talk about…
- What is the most secure lockbox?
- Should I use BIN (Buy It Now button) on the advertising websites?
- How should I deal with dirty tenants?
- At what level of damage do I hold back security deposit?
- What to do with unruly renters?
- My renter is complaining about everything! What should I do?
- I'll do what ever the renter wants – I don't want to make my renter mad, they might give me a bad review.
the list goes on and on…
All of these folks are dealing with the symptoms of the true problem – a problem which they initially have created for themselves… They treat their vacation rental as a hotel.
Loose, Loose. Treating your vacation home as a hotel, always looking for someone new to rent it, will only cause you problems and headaches. Not to mention the yearly costs to advertise your vacation rental to attract new renters.
Recall my story of my Hamtramck tenants? Once you find a great tenant you NEVER want them to leave! Why in the world would you want to continuously put yourself in the position of rolling the dice on new renters year after year? It makes no sense to me.
Recall that at one of my vacation homes we have never advertised on the big advertising sites. In addition, we have never had any property reviews from our renters. And we like it that way. Now, every advertising website out there will tell you differently, they will say reviews matter. I say hogwash. We've never had them and never will.
What do we have?
We have a core group of renters that have rented from us for the past 12 years! They love us – renting a place where they know what to expect year after year. We love them – we know they take care of our vacation home, they pay on time, and they truly appreciate our property.
Win. Win. Repeat renters…
- take great care of the property – as it was theirs
- have a clear history with you paying on time
- refer their friends and family to you
- love going to the same place year after year – no surprises, they know what to expect
Over the years you get to know your renters on a personal level. You become friends.
Yes, initially when you buy a property you have to advertise in some fashion to get new renters. However, once you find good renters, you MUST market to them throughout the year and get them to rent from you over and over again. After a few years go by you will have created a core group of awesome renters that respect you and respect your property.
If you want to treat your vacation rental as a hotel, well then good luck to you… you probably won’t last long in this business.
Next up I will discuss Key #3 to investing success with vacation rentals.