March 31, 2022
Small Company, Big Plans: How To Compete With The Mega-PMs And Win New Vacation-Rental Properties
It seems that everywhere you look, there’s news of a new merger, acquisition, or huge private-equity investment in the vacation-rental property-management space. As big property-management companies, flush with investment, SPAC, or IPO capital, get even bigger, gobbling up properties as they go, how can a smaller, growth-mode VRPM compete? By thinking strategically, marketing smartly, and giving homeowners one thing the megas can’t: dedicated, personalized care.
These four tactical moves will help small companies scale up in a landscape of fierce consolidation and super-tight inventory. And rev up their professional reputation while doing it.
1. Identify gaps in your vacation-rental management portfolio, and seek out areas of opportunity.
- Are you tapping into the kinds of guests you need to meet your revenue goals?
- Are your past guests eager to continue booking with you?
- Do you have the right properties to satisfy their needs?
- Are you operating in areas with high ADR, occupancy, and profit potential?
A good vacation-rental homeowner acquisition plan takes into account all of the above. And targets properties that answer “yes” to each question.
Some property management companies find success in focusing on a specific type of property–luxury, resort-style homes, for example, or live/work units in multifamily buildings. Many companies, though, take the approach of diversifying their portfolio and casting a wider net. Whether you plan to laser in on one property category or manage a mix of property types, you need to understand your guest persona, and what they’re looking for.
- Digital Nomads: These tech-reliant travelers have jobs they can do from just about anywhere. They’re typically attracted by high-speed wifi, a quiet place to plug in and work, cool design touches, nearby food and drink options, and on-site laundry. They also tend to book longer stays.
- Staycationers: Couples and families who desperately need some R&R but are not quite ready to venture far from home on the hunt for clean, safe, private accommodations. They’re looking for accessible, attractive homes stocked with creature comforts, vacation toys, and home entertainment options.
- Bleisure Travelers: Came for work, stayed for fun–this is the mantra of the growing number of guests who travel to a location for a business meeting or conference, and linger on for extra days enjoying the local scene. These travelers may be looking for a city condo or house near good restaurants and nearby outdoor activities, with great WiFi, plenty of towels, laundry, and gym access.
It’s also important that your properties attract repeat visitors. After all, the most expensive guest is a new guest. If your guests aren’t returning year after year for their vacation, or booking your properties in multiple cities as they hop around for remote or on-site work, you need to find out why and fix the situation. Is it your pricing? Your property quality and upkeep? Or are your guests looking for great properties like yours…just in another location, or a little bigger, or with a pool?
And no matter how fabulous the property is, or how eager a homeowner is to engage your management services, it won’t amount to much if the home is in a location with super-low occupancy rates, huge operation or maintenance costs, or highly restrictive STR laws.
2. Put together a solid homeowner acquisition marketing list.
Expanding your portfolio starts with smart marketing. And smart marketing starts with a great leads list. You may not have buckets of private equity cash to pour into splashy ads or expensive list purchases. But you do have these resources at your disposal, and they’re an excellent way to target the homeowners you want and need:
- Property Tax Records: In the U.S. these are publicly available through county records offices and online search services. Realtors can access these records through the MLS. The downside: Some records must be individually downloaded, making it a cumbersome process.
- List-Broker Data: This information helps property managers identify absentee owners who are most likely to own vacation rental properties.
- Permit Data: In areas that require vacation-rental permits, this information is often available through county planning offices, sometimes through direct request, and sometimes through online parcel lookup.
- Data Scrape: A “reverse append” can match scraped addresses from OTAs to the mailing addresses associated with them, which can then be matched to email and phone info.
Don’t focus on just one or two marketing channels–expand your reach strategically.
There’s only so far word-of-mouth referrals or local networking can take you, especially if you’re looking to diversify your portfolio outside of one geographical area. Similarly, if you’re relying solely on email marketing or Facebook to reach potential acquisitions, and not actively analyzing your marketing results, you’re probably missing out on major opportunities.
An omnichannel marketing strategy lets you target potential acquisitions when and where they’re active. It also lets you nurture leads, and move them through the “funnel,” from simply acknowledging their pain points (taking deposits, messaging guests, keeping the property clean and maintained, remitting taxes, not letting permits lapse, etc), to entrusting you with complete management of their investment.
These channels are most useful for marketing to homeowners:
- Email: Easy, low cost, huge reach. Best for raising awareness of solutions to problems.
- Direct Mail: Prestigious and “keepable,” but also pricey, with a fairly low conversion
- rate. Best for raising awareness and bringing prospects to your website.
- PPC (pay per click – i.e. search engine ads or social media ads): Easy, low cost, huge reach. Best for raising awareness.
- Video: Highly engaging, a favorite of mobile users. Best for making connections and building trust.
- Retargeting: Narrowly focused, versatile, scalable. Best for converting interested leads into customers.
A good omnichannel marketing flow may look something like this:
A PPC ad campaign, followed by a targeted email to leads with a link to a video, enhanced by a round of social media ads, and a direct mailing. And don’t forget your landing page: Make sure that wherever you’re directing a click-through, your lead lands somewhere user-friendly, easy-to-navigate, and wonderful to look at, with beautiful photos and/or video, customer testimonials, and personable, welcoming language.
Let homeowners know how much you value their property–not just the profits it may bring you.
The single biggest advantage smaller property management companies have over the mega PMs is the ability to offer highly personalized service and genuine individualized care for their customers’ homes.
These services and features can go a long way toward winning a homeowner’s business over a mega operation, even if your commissions or fees are higher than theirs.
- Guest Vetting: Showing homeowners the lengths you go to screen guests before booking is a great way to build trust. Let homeowners know that you take the time to research guest OTA reviews, cross-check potential guests on social media, and/or ask for identification for each guest staying at the property, not just the booking guest.
- Clear House Rules and Guidelines: Make sure homeowners know that you put house rules front and center on all rental listings. Show them examples of standard rules (no smoking, parking in assigned spaces only, quiet hours between 10 p.m. and 8 a.m., parties and events are strictly prohibited).
But also show them rules they may not have considered (no eating or drinking in bedrooms, please turn off lights and air conditioning when leaving the house), to really drive home how much you’ll care for their property.
- Noise and Nuisance Monitoring: Being able to detect and resolve noise issues before they lead to complaints or property damage is essential to preserving homeowner revenue and permits. And doing so in a way that protects guest privacy, safety, and enjoyment, is paramount.
Let homeowners know that the properties in your portfolio are equipped with privacy-safe noise sensors. Explain that the decibel-measuring technology doesn’t record guests, just alerts you to elevated noise issues so that you can fix them quickly, long before neighbors complain or property gets damaged. Another bonus: Fixing noise problems quickly means less downtime to clean big messes, or repair damaged property, which means more rented nights, more happy guests, and more revenue in their pockets.
Rented is excited to share this guest post from our friend, Natasha Garber of NoiseAware!
Natasha Garber covers trends, news, regulations, and compliance for NoiseAware, the short-term rental industry’s leading noise solution. Since its launch in 2015, NoiseAware has protected more than 3 million stays against noise complaints and property damage. Natasha’s posts on STR property management technology, privacy-safe noise monitoring, and licensing laws can be found weekly on the NoiseAware blog.