Category: Real Estate

Dynamic pricing for short-term rentals: Is this the answer?

Dynamic pricing for short-term rentals is not effective everywhere.  Contrary to all of the recent hype about these great computer programs (for a fee) that will help you make loads of money, they may not.  Then why is everyone on this kick now or “hack”?  Using a dynamic pricing tool will help those who have properties in big travel areas.  It does not always work with vacation rentals.  Before you spend any money or jump to the conclusion that your current short-term rental pricing tools are inadequate read further.

Dynamic pricing comes from searching booking sites

Dynamic pricing software simply searches Airbnb and VRBO website data to determine what is listed for rent, when, where, and for how much.  It looks at a specific area that you are interested in and tells you what you should price your property at for a given day, weekend, week, etc.  The theory is that if you adjust pricing frequently you can capture a greater level of profit and obtain more bookings.  The concept is great for many areas but not all.

Washington DC
Big market for travelers who utilize short-term rentals (more than 5,000 available)

Take San Francisco, Washington D.C., Atlanta, or other large metro area.  A large number of travelers during the year are people on business trips.  I know I was one of those for decades.  Most stays are during the week for what I call “travelers”.  Now “travelers” are not the same as “vacationers”.  Travelers are moving from one place to another mostly on weekdays.  They can stay for a few days or a week depending upon the situation.  Others can stay for a few weeks, months, etc.

Travelers vs Vacationers

Both use short-term rentals, areas with lots of travelers can be managed with dynamic pricing

45% of visitors to Atlanta are on business. 56% of travelers to Washington DC are on business while 22% of travelers to New York City are on business. Needless to say, there is a very large market for business travelers to use short-term rental properties.

Vacationers except for major holidays and the summer will stay for two or three-day weekends.  Vacationers tend to visit areas that are considered tourist destinations such as beaches.  The difference between the patterns of stays between travelers and vacationers is that travelers tend to focus their efforts around big cities and big metro areas that are also vacation areas.  The tourist spots such as the beach, receive vacationers during set periods of the year.  

Hotels use dynamic pricing for travelers

Using dynamic pricing as hotels do in big cities allows them to charge more when for example a convention is in town and less when it’s over.  For this reason alone, using dynamic pricing in these areas is a good tool.  Let me try to explain why it is not always an effective tool for earning higher rental income from vacationers.

During the low season, there is little you can do except to reduce the minimum stays from 5 to for example 3 as in a weekend or even two.  The problem is that fewer people are visiting.  You and everyone like you have the same idea so they all reduce the number of stays for example.  The next thing the first-time owners will do is to reduce rental prices.  The thinking is that lower prices will attract more people.  It’s possible but if everyone does the same thing, where does that leave you?   Chasing the prices down.  Again, remember fewer people are coming to the area.

Short-Term Rentals vs Vacation Rentals

Both are the same in most cases. Most guests (57%) search for the word “vacation” vS SHORT-TERM

During these low periods which can stretch for months, dynamic pricing will not generate more revenue or higher occupancy.  It’s just as easy to determine market rates by going to Airbnb and VRBO listings.   You would want to do this anyway to assure yourself that it’s not just your property that is not renting.  Of course, negative reviews can have an impact, actually, one that is far greater than using dynamic pricing software. 

Use a local property manager

Your best move is to use a local property management company.  Good local property management companies know their markets far better than any software located in San Francisco.  Short-term rental hosts are good at pricing owners’ property to obtain the best result.  Local short-term rental managers have been using the concept of dynamic pricing well before computers have been offering it.  Their approach is hands-on.  

They know the market, block by block, and understand that some areas are more desirable than others.  Computers do not catch the fact that during the height of the season, even a shed will rent.  During the critical periods of the year e.g. fall and winter, the better properties will rent more often.

Customer support and return guests are very important.  People who have rented a property and like it will be more inclined to return without price shopping.  Also, property managers are in a position to offer a last-minute deal when someone calls requesting a stay with one hour’s notice.  How about a few examples of how this works:

Last week, a guest booked a stay at the property management website because Airbnb and VRBO cut them off, within one hour of arrival time.  They booked on the website and called the property manager.  They were fortunate that the property had been cleaned and moved in.  In another example, a very large party moved into a property where there was a water leak.  

The property manager was able to move the large party to two adjoining condos at another property immediately.  If it were not for the quick work by the property manager the 7-day booking would have been lost.

How does a local property manager arrive at pricing?

​A discounted rate can be offered by the property manager for returning guests or friends of owners for example.  Let’s discuss how a local property manager arrives at a dynamic pricing solution.  At Christie’s Gulf Beach Rentals, the managers look at the entire year calendar.  They mark out beginning and ending dates for every holiday that brings in more people.  

Every event that does the same and any other periods that should be priced higher such as June and July.  Prices are adjusted according to the calendar using competitive data that is obtained from third-party platforms and from talking to other property owners.

While this system does not raise and lower rates from Monday through Thursday for example (unless it’s an event or holiday), it does consider all opportunities for higher revenue based on the volume of vacationers coming to the area.  When it is busy the prices are higher and when it is not, prices are lower.  Pretty simple.  As I mentioned above, in big cities when travelers are coming in for events, etc., rates can be adjusted daily.

During the low seasons in tourist areas, raising and lowering prices during the week makes no sense.  Often our clients will make price recommendations which more often result in lower revenue.  Recently a client asked that we lower their prices because they were not getting what they thought was sufficient rentals.  Christies did what they asked.  

Prices were increased and they earned more per stay

There were a few short-term rentals during the period but at a lower price than other Christies properties were receiving.  They concluded that they needed more revenue and the prices came up.  The occupancy rate did not change.  What did change was that they earned more money.

Higher prices can affect the number of sales during most of the year.  Some clients want higher prices and fewer stays because the theory is by the end of the year the total income would be about the same without the additional wear and tear on their property.  

Property management companies understand pricing dynamics and adjust them accordingly.  You can play with prices only so much.  The key to any successful vacation rental property is guest count and price hitting that sweet spot.  In some areas, there are so few rentals during some seasons that reasonable prices should bring in as many guests as any of the competition.

Fewer bookings are a trend in 2023 and will be in 2024

Fewer bookings have been the trend because of the larger number of vacation rentals hitting the market since 2021.  Lower prices in this environment are not the best way to increase revenue.  Of course the average base rate is lower during the low season, you do not need expensive software to accomplish this.

A great way to entice more people to stay at your property if you are an owner is to help the property manager by advertising to everyone you know.  Push your property on Facebook and other social media.

The short-term rental market is in transition.  Market demand is about the same but with more properties available, short-term rentals become more of a commodity.  Short-term rental properties must be ready for the peak season.  You can help your property by having everything repaired and doing preventative maintenance during the off-season.  

Short-term rental owners should stay at their properties during the off-season to be sure that everything is ready for the peak season when more extended stays are in high demand.   I have had issues with my properties during the peak season e.g. AC and had to move high-paying guests losing the revenue.

Local property managers know their seasons

​Your property manager knows how to manage the peak season, this is the one time when even the dynamic pricing is exceeded by “what the market will bear”.  There is no need to run numbers during this season as virtually everything is booked in these vacation areas.  Getting back to the benefits of dynamic pricing, they fall into the big metro areas on a year-round basis where catering to both vacationers and travelers is the focal point of their efforts.

Beach Biloxi Crowd
Vacation locations receive crowds at the same times of the year every year

Real estate investors must understand the idea of the best price and a competitive price as explained by their property managers.  Many look at the high season as the savior where most of the income is earned.  This may be true for some real estate investors but not for all.   The high-season income is not as great as it has been in past years so using that income to cover gaps in the remainder of the year is no longer a good strategy for many property investors.

Research using the free Bard AI

If you decide that you want to do some research, use Google’s Bard, AI to inquire.  I asked the following question of Bard:

​”How many 2-bedroom short-term rentals are being offered for rent on Airbnb in Gulfport MS” The answer is as follows:

According to the Airbnb website, there are currently 394 2-bedroom short-term rentals being offered for rent in Gulfport, MS. This number is based on the search results as of August 5, 2023, at 11:31 AM PST.

The average nightly price for a 2-bedroom rental in Gulfport is $129. The most expensive 2 bedroom rental is listed for $212 per night, while the cheapest 2 bedroom rental is listed for $88 per night.

  • A Bard search also determined that the number of searches for vacation rentals in September 2023 vs. September 2022 was 6.25% higher. Searches for short-term rentals were 9.09% higher for the same period. By itself, this data will not affect a property manager’s decision on pricing short-term rentals but it’s a factor to take into consideration.

If you use an AI, learn to use it first

​If you have time, you can continue to dig using various parameters.  The data is the same that is used by all of the dynamic pricing software models.  Some include VRBO but the trends will be about the same so I stick with Airbnb.  There are other service providers but they usually take their data from Airbnb and VRBO.  You can obtain market data and market trends from Bard too.  Or, you can just talk with your property manager.  

A word of caution about using an AI like Bard. The data provided can often be incorrect. As a property manager, I know this when I see it. Many would not. It’s very important to tell the AI Where you want to obtain the data. For example, it may find data at a website that grabbed some from Airbnb and others. Aggregated sites are not always accurate. learn how to use an Air before you rely on its results. Another good reason to ask your property manager.

Property managers use a variety of management systems that help them manage their businesses and short-term rentals.  Most property managers that I talk to manage their short-term rental business by doing local research which includes not only data on the web but also speaking to Cities that issue licenses to properties.  Sales tax revenue data is also available that can provide indications of the health of the local markets.

short-term rentals price break down
listing on Christies Gulf Beach Rentals Site

Summarize: Dynamic pricing is good for some but not everyone

To summarize, Dynamic pricing is good for large cities and metro areas where travelers and vacationers create an almost year-round market.  There are many markets in North America where dynamic pricing will probably not improve profitability. Beach areas away from big cities, mountain areas, and others that have seasonal business don’t need dynamic pricing for the busy season.  Nor do they need dynamic pricing for the slow season.  

Local property managers fully understand the dynamics of their market including the availability of properties, pricing, and activities that affect pricing e.g. special events.

Visit ChristiesGulfBeachRentals.com and read some of our blog articles about vacation/short-term rental management. Our clients receive access to their client portal which has a wealth of information to help them understand the market and value of their investment.

If you are interested in purchasing a property for use as a short-term rental or vacation rental/second home, click and see what is available on the Mississippi Gulf Coast.

Please stay with us on your next trip to the Mississippi Gulf Coast. Check out our great properties and reserve on this site. Vacation travel insurance is included at no additional charge.

William Anderson Income property, Mid-term rentals, Property management, Real Estate, Vacation Rentals

The best successful vacation rental marketing strategies

As this is written in mid-2023, the market for vacation rentals has grown a bit but the number of vacation rentals has outgrown demand.  At the beginning of the growth spurt during the Chinese virus pandemic, people bought without much thought to the outcome.  Many just wanted to get away from their home located in a state that kept them from leaving the house.  They came to a beach location that had no restrictions and bought that vacation property.  Most did not know that at the time, there were more people who wanted to get away than there were properties to go to.

Income was coming in at a record pace.  People were grossing $50,$60, and $90,000.  This added to the stampede to buy a short-term rental or vacation rental as most call them.  Zero marketing efforts were required, just post and they came.  Often these people did not use property managers, it was fun to manage the calendar and let them in using a wifi lock.  Looking around for a good cleaner was a problem (and still is) but many overcame it somehow.    

Then the election came and with it higher prices for everything.  People were exhausted from vacationing as they were from staying at home.  Remember when you could not find a boat or a motor home to buy?  How about a bicycle?   Check out the lots, full of RV’s and boats.  The same is true of vacation rentals.  

The vacation rentals industry has turned upside down.  Foreclosures are starting in many areas where you can buy a bank-owned home complete with furnishings.  Property owners are walking away from their “hobby” as they simply can not make two payments with such low revenue.

1.4 million U.S. vacation rental properties were available in (est) 2017

2022 estimates are 1.98 million in the united states. A 41% growth over the last five years. 5% growth in 2023 alone

Things have changed in two years

All of the above has come from personal experience.  I am a co-owner of a property management business on the Mississippi Gulf Coast called Christies Gulf Beach Rentals.  My personal experience comes into this article and hopefully, it will help you understand this business and if it’s right for you.  Owing and operating a successful vacation rental property is far different now than it was two years ago.

Bell curve vacation rental history
A rough diagram of the history of vacation rentals on the Mississippi Gulf Coast. This will mirror other areas as well

Bell Curve

The bell curve above (pardon my rough line) is a depiction of how the vacation rental market has evolved in the Mississippi since 2017. As with most bell curves, early adopters get into the market and set the trend. These early adopters buy in at lower costs and are often profitable from the start. As you can see, more and more investors came to the market pushing up prices and increasing the number of properties available.

Most of these initial buyers were experienced investors who wanted full-time rental properties. These were not second homes or even for the most part vacation homes. Later as the Chinese virus hit hard, people wanted to get away from home. The Mississippi Gulf Coast was wide open and prices were a bargain. The frenzy did not stop except for experienced investors who saw the over-supply hitting the top of the curve. They bought in early and started to offer properties for sale.

As the income stream started drying up in late 2022, many vacation rentals hit the market. Some were early foreclosures. People bought expected to generate a profit and they were not covering operating costs. Second-home buyers started entering the market. These are buyers who can afford to buy their property without support from renting. They will rent for “extra” income.

More vacation rentals will hit the market in late 2023

I believe that more properties will hit the market fully furnished by the end of 2023 to head off foreclosure. Second-home buyers will have many opportunities to buy. The supply of vacation homes is still increasing but perhaps some of the foreclosure sales will be to full-time residents, reducing supply.

Google my business, ChristiesGulfBeachRentals.Com, it’s a good place to start for several reasons that I will get into.  First, I took time to look at several articles on essentially the same topic as this article the Best Successful Vacation Rental Strategies.  All of them say the same thing.  

That’s good and then it’s not so good.  Every one of the articles could have been written by an AI.  They are structured to get your attention with lots of charts and numbered lists.  That’s an excellent way to rank high on Google but does not exactly pass along any original information.  

Coral Cove enterntainment area
Coral Cove Entertainment area

Get into a vacation rental that will actually earn money

Now that I have your attention on the state of things, let’s get into what can be done about getting you into a vacation rental property that will actually earn a few dollars.  Hear me well, I will not tell you that you can make your vacation rental business fully pay for itself and generate a profit.

The only way to buy a property and cover all of the costs and be profitable renting the unit exclusively as a vacation rental is if you pay cash.  There was a time when a 10% down payment loan at 5% interest would have generated a very nice income.  That time is gone at least for now.  Since no one has a crystal ball, it’s hard to tell when the supply of vacation rentals is meeting and not exceeding the demand. Things can change in the future but this is where we are now.

We will get into the details of a strategy but first and very importantly, you must answer the following questions for yourself:

  • What are your goals for this property?
  • Can you afford to pay any shortfall in income up to 100% of all operating costs including a property management fee?
  • Do you want lots of guests paying lower rates or fewer guests paying higher rates?
  • How much time will you spend at the property and will that be during the high season?
  • Do you want to set up the property for the maximum revenue or are you more interested in unique decorations and furnishings for your own use?
  • Have you considered a budget to furnish the property?
  • Who will set up the property for rental e.g. order furniture, decorate?
  • During the set up which could take a couple of weeks to a couple of months, can you cover operating costs including a mortgage payment?
  • Are you buying the property in an area that is likely to generate income or because you like it there?
Second home snow
Second home, get away from the snow in the winter

Decide in advance why you are buying the property

These questions are important.  The point that I am trying to get across with the questions is that you must decide in advance of buying a property why you are doing this and why you have selected a specific area for your investment.  Just because it’s a great place does not mean that potential visitors will see it that way.  I recently had a conversation with a prospective client who liked an area in Florida and they were considering buying there.  

They ultimately decided to buy on the Mississippi Gulf Coast but my point is that they “liked” the area in Florida without any consideration to the local area and if it was one of the popular destinations that prospective guests want to travel to.  

I have other clients who decided that they truly wanted to own a “second home” and then rent it for income when they were not in residence.  Now this is a concept we can talk about.  Considering rental income as secondary to their need for a second home in an area that they loved.   Then, use the condo as a rental home for vacation-bound guests.  What a concept.  This solves the issue of earning enough income to cover costs.  This concept takes the pressure off the owners because they can afford to pay the bills regardless.  

A second home

As a second home, there is no need to create a price to attract lots of guests.  It’s better to list the property at a slightly higher price and the best way to attract that ideal guest.  You may not be in a position to buy a second home without some income to offset some or most of the costs.  In this case, you are the person who has come to this article to learn about the Best Successful Vacation Rental Strategies.  

Keep in mind throughout the remainder of this article that it is highly unlikely that you can earn enough income to cover 100% of the income necessary to cover a mortgage and all operating costs.  There are some benefits that will help you take the edge off such as passive income tax deductions, appreciation, and reduction of the principal payment.  All are helpful but will not necessarily pay the immediate bills.

to do list

What you need to do

Christies Gulf Beach Rentals uses a multi-disciplined approach to marketing our client’s properties.  Much of what we do is listed in the articles that I mentioned.  Let’s start by listing them. Everyone likes lists:

  1. The property is completely set up to be comfortable and permits guests to prepare meals and launder their clothing.  
  2. Amenities are added when practicable.  Outside: Firepit, bbq, horseshoes, picnic table, chairs.  Inside: Flat screen TV living and bedrooms, coffee service, and more.
  3. Property Management company website advertises the property as a rental listing.  The use of a professional photographer is recommended for vacation rentals as photos are key in the decision-making process.
  4. Airbnb, VRBO, and the companies they own (automatically) are posted by a property manager
  5. Facebook and other social media channels posted by a property manager
  6. Owner posts on their Facebook and social media accounts.  Their friends and family post it also.
  7. The property manager creates a podcast for the property plus other valuable podcasts on a regular basis to draw people to the website
  8. Youtube walk-through of your property will attract guests.  Walkthrough is posted on the property manager’s website also
  9. Blog articles written about the property managers’ properties and other topics about the area attract readers to the website
  10. Discounts offered for previous guests, first-time posting discounts, and other promotions using social media marketing
  11. Programs such as the “Snowbird” program are specifically for those who come to the South from cold climates in the winter.  Promotes longer stays
  12. Other target markets.  In Christies case, the military comes to attend school and can rent local properties. 
  13. Coordination with other bloggers who write about the area and connect Christies to their articles.  
  14. Mingle with local businesses and influencers who can recommend the property management site and therefore your property.
  15. Email marketing through a newsletter is another way to communicate with previous guests about returning. People return to vacation rentals, so why not yours?
marketing social media
Your social media can help

Marketing vacation rentals is an art and a science

Marketing vacation rentals is an art and a science.  It all starts with the property being located in the right place.  Properties closest to the beach on the Mississippi Gulf Coast will usually rent more often.  Ones that have a beach view will rent more than those that are across the beach but have no view.  Christies has two properties that are both early 20th-century houses that have been completely rehabbed.  Guests can sit on the porch and see the water.  These properties are in demand and at higher prices.

Properties that accommodate more people will usually generate higher income.  If your property can only accommodate two, it will not appeal to a wider audience comprised of 4,6,8+ guests. When owners come to us already owning properties that are not in the most ideal situations, we focus on the things that will bring people in.  High-quality photos are critical particularly for properties with low light.  The professional photographer will lighten the rooms and make them more appealing.

We focus on unique features for the property that others may not have.  If yours is a condo in the development of condos, we must target market your unit as being different than the others.  We rarely promote development.  Most people will be first-time guests and do not have a clue that the property is located in the famous “XYZ condo development”.  If everyone else is promoting the same development they can not stand out.  

Beach n' bungalow vacation rental
Creative way to decorate property

Decorate for the market, not your personal taste

Your property must be properly decorated and themed to gain the highest income.  If you have decorated it to suit your personal taste and do not need much income, then we work with what we have.  If you want to earn more money, we may suggest that you install a sofa sleeper and put some beach-themed art in place of the deer antlers.  Basically, we need to create a vacation rental brand for your property. We want to improve the guest experience so that you earn positive reviews. 

After posting the property on VRBO, Airbnb, and our property management website, we start pushing the postings out to create brand awareness.  Essentially we start a social media campaign that will consist of posting your property on Christies Facebook page and other social media sites.  We will create a video walk-through that is fully narrated not just music.  

The video will describe what the viewer is seeing and encourage them to visit the Christie website and book VRBO, ABB.  The video content is then posted to your property listing on the Christies website.  People will visit Youtube to see your walkthrough and book your property as a result.

Facebook social marketing
Social network is key

Your own social network is key

We pass out lots of business cards directing people to the Christies website.  We also offer to our clients the opportunity to have business cards for their own property with a QR code.  Why would we do this?  With all of the competition, it’s important that your property be advertised to the maximum extent possible.  This includes all of your contacts and those of your children and other relatives.  Why not help in the process?  

Talk about your property, you are proud of it and want others to experience it.  Pass out cards in addition to using social media.  Your friends can scan the QR code which will take them to your property on Christies Gulf Beach Rentals website.

You can also suggest that they look at the website.  They should use the menu read about the area and all of the great things to do.  This is part of the marketing effort not discussed on the other sites.  A simple thing handing out a business card but now that I have brought this up, it’s time to talk about your short-term rental business.  

Yes, that’s right, your short-term rental business.  If you have not already created an LLC in the state where the property is located, do it now.  Then transfer the property via quit claim deed to the LLC.  This will help protect your personal property in the event someone sues your property LLC.

Protect your asset

​I recall a recent discussion with a prospective client where I told him since he paid cash for his property it is ripe for a lawsuit.  Create the LLC and make the transfer.  That’s a good thing to do when you have a mortgage.  If you pay cash for the property, you need to take one additional step.  Create a first mortgage against the property to your trust.  

This means that the property you just paid cash, for now, owes about 80% of the estimated value to your trust in the form of a mortgage.  The mortgage is filed with the county as a lien on the property.  This way if someone comes after your LLC, its assets are tied up.   I am not a lawyer, seek help from one if you want to know more.  

After the big push on social media platforms to promote your business (property), and the business card we discussed, the market will start making some decisions for you.  The most effective way beyond a successful marketing strategy is to make sure that your property receives high marks from guests.  

Vacation homes stand out with high ratings and that draws more people.  When your property is first exposed to the market on rental websites, there are no comments.  It takes time to build a reputation.  Your property management company can help.  Paying attention to all comments about how to improve is important.

rental agreement
Rental agreement

Long term rental

Recently, a guest called about a garbage disposal that was clogged.  One of our team went there and found part of a dish rag and glass in the disposal.  We know it was working well when the cleaner was there.  The guest said it was that way.  They forgot when they called they said it was working and then not.  If this was a long-term tenant, they would have paid for this service call.  

Our team cleared it and asked the guest if they were satisfied with the property, the answer was a resounding yes.  They and we know who caused the clog.  The point here is that great guest service from the property manager reinforces the marketing effort.  

Rental hosts are key to customer service finding creative ways to improve guest satisfaction in the form of good reviews.  New guests will see that what they read was accurate and that will help with their rating.  There is no substitute for great reviews.  Potential guests often make contact with the hosts (property managers) about the property.  These contacts are often by telephone making the service more personal.  

Copy of Christies web page for vacation rental property management

Effective vacation rental marketing plan

​Every short-term rental needs an effective vacation rental marketing plan using some or all of the elements described above.  That plan along with the personal touch from the property managers will focus efforts based on your type of property.   An important factor is your completing the list of questions above before moving forward.  That’s the first step.  There are a lot of rental properties on the market, what will make yours special?  

I hope that this article has enlightened you somewhat and that you know more now than when you first started reading.  If you decide to look at the Mississippi Gulf Coast as a potential vacation rental site, contact us before you do anything.  Learn the area first.  

I am a real estate broker and I often receive requests about properties that are “cheap” and of course, that is a real statement coming from outside of this area.  You can buy properties for less than $300,000, even as low as $85,000 but they are not all prime for vacation rentals.  The worst thing you can do is to buy a property and find that it is located in an undesirable area for vacation rentals.

Read the blog articles on this site under “news”.  Check out Logan-Anderson Gulf Coastal Realty where you can read even more about the area.  One more recommendation, RetireCoast.com a blog about the Mississippi Gulf Coast.  

Please leave comments and return to our website for more about vacation rentals and to book a vacation rental.  

William Anderson Gulf Coast, Real Estate, Vacation, Vacation Rentals

Good reasons NOT to hire tech based vacation property managers

​Are you looking on the internet for a property manager for your vacation rental?  Stop.  Don’t hire an internet-only tech based property management company.  Why? They are not local and hands on your property.  A San Francisco or Denver-based person in a cubicle has no idea where your property is or what is going there.  You need a local, professional, property management company.  What to know why?

A new client called and said they were working with a Denver-based company when they learned from a neighbor that the police came to their new property.  After the dust settled, the “guests” decided to have a large, loud party.  People were parked on neighbors’ lawns and the noise kept on until the police arrived very late.  

The owner learned from the cleaner that the property required not only heavy cleaning but many items were broken or damaged.  The owner spent $3,000 on repairs.

The internet tech-based manager had no clue

The internet tech-based property manager located many states away in a different time zone had no idea.  The police did not know who to call and as it happened, the internet company did not tell the property owner that a permit was required in the city.  Fortunately, the permitting department was not informed of the disturbance by the police department.  Of course, the Denver-based company had no representative on site to deal with the police.

​Later that week the owner called us and we took over the management of the property.  One of our tasks is to drive by the property periodically e.g. each week for a view of the outside.  We visit during turnovers also.  

This is just one example of many that have driven vacation owners to local property managers.  We have obtained many clients from the San Francisco tech-based and other internet companies who were very displeased.  I have participated on a number of forum sites where I hear the same complaint from others.  

It seems that every month a new tech start up thinks they can manage property from a basement or high rise.

People require attention and the best guest experiences are gong to come from personalized attention. This means human beings making contact with guests on site.

New investors are looking for a low-priced manager

What I have found is that new investors are trying to save money in most cases so they look for rates first.  Some will contact local property managers and decide to go with the internet people because it’s easy, they just open an app.

The idea of managing property from afar is interesting.  Your investment rental properties are the most valuable assets you may have other than your own home.  How can you trust it to someone who has never seen it?  Really?  Short-term rentals are real properties, they require maintenance and attention.  Trying to rely on cleaners to inform you when something requires work is just not smart.  

Do you think that the San Francisco people have actually met with the cleaners and inspected their work?  No, of course not.  A very valuable asset managed by people with no vested interest, who have never seen it.  Excellent stewardship of valuable assets.

Local managers provide a sense of security

Rental owners should expect much more from those who are responsible for their property.  Property management services offered at the location where the property is should provide a sense of security.  Real estate investors should know better than to entrust their property to strangers.  You may say, well guests are strangers, true.  It’s not the same thing.  

If during that one day in the winter when the water hose freezes and breaks, who will be there to turn off the water?  How about when that squatter moves in during the slow period, Is anyone in the Denver tech based basement going to fly out and evict them?

Check out the chart below. A list of items supplied that property managers often encounter. Learn how a tech, long-distance-based company would deal with them vs the local vacation rental property manager. This list is by no means complete.

vacation rental on gulf coast
Vacation Short Term rental house

COMPARE TECH/INTERNET/REMOTE MANAGER SERVICES TO LOCAL PROPERTY MANAGER SERVICES

Task/Item Tech Manager Local Manager
Vetting repair businesses Telephone calls, internet search Personal recommendations from actual customers where work can be observed
Police presence at property May or may not know, telephone Manager on site to work with police and diffuse situation
Discover illegal substances Probably don’t know Manager discovers, evicts or warns
Spot leaking toilet If cleaner misses they dont know Inspection finds before next rental, has it repaired
Overbooking issues Possibly put in another property if they have one in the area that is vacant Put into another property or contact other property managers with relationship to accomodate. Works in reverse.
Damage caused by guest Have contractor assess or cleaner Manager with experience will assess and have the issues resolved at the lowest possible cost in the shortest time
Guest decides not to leave ? Manager meets with guest, requests they leave if not contacts local authorities with whom they have a relationship to evict.
House needs exterior paint No one to notice Manager looks at the condition of the property on a regular basis and schedules maintenance program
Owner can’t find remote Speaks to guest tells them to look Manage brings a new one and helps look for the existing one
Last guest left hose turned on No one to notice If freezing weather, manager will inspect property early in day to insure no water breaks
Hurricane approaching Call guest and ask to leave Manager will determine if hurricane is actually going to land in area and not two states away and keep guest informed.
Recommendation for local food Tell guest to look on internet Manager will inform guests of places they have eaten and how to get there, hours best dishes etc.
Guest wants to rent a boat Check internet Manager will tell guest of discount provided to guests of Christies and details about the rental process
Guests have too many cars to park ? Manager will explain areas where they can legally park extra vehicles including other properties they manage
Best place to see a Mardi Gras parade Internet Manager will tell guests where they go, how to get parking and where to sit
Obtain city permit for vacation rental Probably don’t know a permit is requried Manager will assist the property owner in obtaining the correct
Pay sales taxes and complete reports Probably not Christies reports monthly to State for taxes

Most Internet/tech based Managers don’t do this

One of the larger companies charges a fee that does not include cleaning, maintenance supervision, or virtually anything to do with the actual property. What they do is post your property on the internet and coordinate with the guest to arrive there. The rest is all on the property owner. This company was reviewed by Rabbu.com. Their name starts with an E.

Another larger online company charges a list of fees and offers a linen service program and other programs with monthly fees pushing your cost higher and higher. Again, all coordinated from that basement or tower office in the far-off city.

The best property management companies are ones that operate in a defined geographical area where they can physically get to each property.  A poor property manager is one who is not paying attention to the inventory of towels and regular maintenance.  The right property management company will do simple things.  For example:

​A property manager for a local property management company will occasionally drop off donuts in the morning to guests.  It’s a simple thank you for staying.  Another has dropped off small gift baskets when a special occasion comes to his attention.  The folks in the tech-based San Francisco tower are not likely to fly out and drop off a dozen donuts.  

Local property managers have a real reputation not only to make sure the guest’s stay is excellent but because they are a member of the community.  Bad news travels fast.   Rental management companies need all of the goodwill they can get because they are competing with the lazy approach e.g. the tech groups.

The property manager inspects the work.

Local Managers required

Many cities and counties require that the property manager be local. The rules below for Sonoma County are an example. Do you wonder why they ask for a local property manager? I was told by an individual working for a local city. There is a great deal of mistrust among the general public about vacation rentals in general. Most of the reasons why residents don’t like them is based upon rumors and misunderstanding.

The cities and counties have had bad experiences with removing tech-based property managers or even when owners try to manage their properties from afar. These few bad experiences are sufficient for them to be concerned that the public may latch on to future issues and force them to stop allowing short-term rentals. There is zero faith in a tech-based remote property management company’s ability to step in and fix an issue or prevent one form

Christies guest book

Christies, creates a “guest book” for each property that is specific to that property.  It’s intended to inform guests of all of the amenities of the property they are staying in and to convey the rules.  This book is particularly necessary for condos to help ensure compliance with local condo rules.  

One of many jurisdictions that require local property managers, wonder why they are requiring this?

We could send an email to guests about all of this but does anyone expect a guest to remember what was sent or refer to an email months later?  This is just one customer service that a local property manager can provide to help improve the guest experience.

One of the things that online property managers provide is technology.  Reports etc.  Local property managers hire experts too to create a similar experience for their guests.  Christies provides an owner portal that not only provides a consolidated calendar but links to third-party sites, financial results, copies of signed documents, recommendations for setting up new properties, and much, much more.  

The information we provide comes from hands-on experience.  Our data was not created by scanning the internet for suggestions.

tech based property manager
Tech based manager just learned a clients property was broken into and damaged, and guests arriving the next day

Do tech-based operators know about houses?

Can one assume that most of the employees at the tech companies have years of experience not only as good property managers but understanding issues related to home maintenance?  When a guest contacts them about a problem, they look up their local contractor and make a call.  When there is a problem, we may know the source since we know the properties.  

I just received a call that the refrigerator was not cooling well.  I called our local contractor who works on all things refrigeration and he went there and fixed it.   This may sound simple but it’s not.  When the West Coast manager calls, it’s to a larger company that may be too busy for an immediate fix.  When we call our local contractors, they respond promptly because they know it’s important to us.  Plus, they all know how to interact with guests who may not be happy at the time.

A good property management company will charge a fair price for their services.  It’s difficult to list all the times that someone on our team went to a property when a guest asked for a hair dryer (an old one stopped working) or to drop off extra pillowcases because their children had an “accident”.  How about times when they could not get the TV to work with their streaming service and one of us stopped by to help?  Do the people in those cubicles do this for their clients?

Can the tech-based operators clean for a fast turn?

How about a fast turn?  A last-minute guest books the afternoon that a guest has left in the morning.  All of the cleaners are busy with other properties.  Our manager will go out and clean the property.  We want the property to be in good condition when the next guest arrives.  Is there an additional charge for any of the above to the owners?  None.  It’s all part of what local short-term rental property managers offer every day.

Another time, the air conditioning went out on a property.  We were fully booked.  The manager found a motel that would take our guests even with their dog (that was a trick).  He helped them move their luggage.  There was no cost to the guest and they received a full refund for their stay.  This was our decision, not a third-party decision.  The next time I need help with my luggage I will call the Denver tech-based call center for help.

About those communities that require local property managers.  There are several on the Mississippi Gulf Coast where I am located.  Very often property owners contact an Internet property management company about their short-term rental business.  They decide to sign up and are not told that the City will not permit them to use a non-local property management company.  If these companies are so great with technology why do they accept a client who must have a permit?  

Tech based vacation property manager prohibited from managing
Example of Short-term rental permit application (they require a local manager)

Often permits are required but tech-based manager lists them anyway

This is the incompetence of the first order.   I often look at short-term rental listings and find that some of these same companies have rentals in areas where permits are required.  It’s a matter of time before the city checks on vacation properties and just find no permit is in place.

The vacation rental business is changing.  Airbnb went from one million properties in 2018 to over four million in 2023.  More properties on the market mean the short-term rental market is changing.  This means more internet start-ups touting lower prices and more services.  

These rental companies attract new property owners by dazzling them with terrific reports.  Unfortunately, as much as they try to promise the performance of the vacation rental, they can not.  The fact is that there is so much competition that occupancy rates are reflecting fewer guests to any single property.

A good rental property management company will utilize all of the power of technology, the same power that the Denver-based people use.  With artificial intelligence available to everyone, it’s more difficult to differentiate your business.  Local property managers differentiate their business by being there and knowing their clients.  They are passionate about the area and can tell stories to guests about it.  All of the property management software in the world will not make up for this personal touch.

Guests like to have the property manager dropping by

I will often visit a vacation rental and talk with the guests about the area.  They are usually eager to learn about the best restaurants from someone who has been there.  They want leads to rent toys or the best place to fish.  All of this is provided by knowledgeable local property managers.  

When I receive a call from a potential guest asking about the area, I can speak with them for a long time.  Many of our guests return because their stay was so pleasant.  Not just the actual property but those donuts as well.

Online reviews can be scrubbed and they are.  Local property managers place a guest book where guests take the time to write great comments.  These unfiltered comments provide great information to the property managers and owners.  This is part of guest communication.  

Granted it’s the back end but the front is equally good.  Every guest will receive a phone call from the property manager.  The whole point is to ensure that their stay is an excellent adventure.  This communication also helps to prevent negative reviews.

Inventory checklist
Inventory checklist

Regular property inspections are important

Regular property inspections are a key difference between the San Francisco tech-based folks and the local property manager.  The rental manager for that short-term vacation rental is representing the local rental management company that they may be an owner in.  This makes a difference because it’s not just an employee performing the inspection.  

Not only are the inspections looking for things that must be cleaned better, replaced, or repaired, but they are also checking for compliance with local regulations.  Particularly if there is a permit in place, the property managers are looking for items required in the permit.

The major irony in the need for this article is that while the internet folks can go to the capital markets and get millions of dollars to invest in their untested business, local property managers must fully fund their efforts on their own.  These smaller businesses with a vested interest in ensuring a good property value for their client’s property must struggle through all of the internet noise to be found.

property manager which is closest tech based or local
A water break after a freeze, routine local property manager inspection discovers the problem. Tech based security cameras miss it

Local property managers compete on the internet with start-ups

 Local property management firms use the internet to advertise their services but are often overcome by the sheer dollars dumped into the Internet to advertise the distant rental management agreement program.  

​Something that is of potential benefit for property owners is that many local property management companies offer long-term rentals to the public.  We recently suggested to a client that it was in her interest to rent her property for the long term due to the current crowded short-term market.  Many rental property owners are likely to go this route.  The difficulty of doing this on a national tech platform is all of the rental rules in every state.  

Consider the worst-case scenario.  You selected a bad property manager in Denver.  There was damage to your home and how to you recover from them?  You are in one state and your property is in another state.  Many states require property management companies to be connected to a licensed real estate brokerage (Christies is) or to have a license.  

If there is an issue at your property and the local property manager caused it, there are out-of-court remedies.  Rental agreements in these states must follow guidelines to comply with the law. Don’t use internet tech based vacation property management companies.

Services provided by Christies Gulf Beach Rentals:

  • Complete set-up. You buy the house, condo, or townhome, we do all of the work. Including ordering furniture and furnishings plus decorating. Completely turnkey.
  • Supervising work to get the property in good condition means working with contractors to replace windows, doors, and other types of work necessary to convert the property from what it is to what it can be.
  • Provide accounting services.
  • Pay all of your bills each month including utility, mortgage, etc.
  • Much more is offered, ask us. All of the above is at additional cost and over and above the services provided to manage the property and guests.
  • Visit ChristiesGulfBeachRentals.com and read our blog articles and check out our site and other properties that we list for rent. Contact us if you are interested in having Christies manage your Mississippi Gulf Coast property.by using the button below.
William Anderson 1 Comment on Good reasons NOT to hire tech based vacation property managers Property management, Real Estate, Vacation Rentals

Best Mississippi Gulf Coast Vacation Property Rentals Management Services

​Looking for the Best Mississippi Gulf Coast Vacation Property Rentals Management company?  Christies Gulf Beach Rentals can manage your vacation property completely hands-on.  We do it all for you from managing the calendar and managing the cleaning process to directing repairs and maintenance.  Our owners have decades of experience with property and business management.  Our client portal has it all for you to help you manage your finances.

One of our owners has owned and managed a large national business.  He has decades of experience with vacation rental management having owned many in Europe before the trend was popular in the U.S.  Another owner has more than 20 years as a property manager.  I could go on about our experience but it’s about how this experience is applied that you should be interested in.  

We created Gulf Coast Property Management LLC for long-term vacation rentals management and then started Christies Gulf Beach Rentals for short-term rentals.   We have two websites that refer people to your properties, not including the referrals from our associated Logan-Anderson Gulf Coastal Realtors website.

Christies calendar is consolidated with 3rd party sites

The state of Mississippi requires that all property management companies be affiliated with a real estate agent or broker.  One of the Christies owners is a broker and owner of Logan-Anderson Gulf Coastal Realtors.  This is a good thing for our clients.  That real estate brokerage license means that the state is watching our operations. 

It’s true, most of Christie’s bookings come from third-party sites such as Airbnb and VRBO but some of those bookings have come from people who have first visited the Christies website.  Our site contains a consolidated calendar of all third-party bookings.  

The calendar indicates all bookings for our client’s properties.  If they choose to stay on their property, they can book it on Christies with a special code that permits their stay to be free.

The client portal contains links to not only the Christies site but their listings on third-party sites if they decide to look at them.  Included in the Client Portal are links to the linen inventory, maintenance logs, agreements, HOA rules, and much more.  It’s literally a one-stop place for everything they need to know about their property.  One key item in the Client Portal is our financial data which indicates all details for paid stays.  

vacation rental property
Newly constructed house, one of Christies vacation rental properties

No email reports, just 24/7 access to all data

Rather than sending out reports and emails.  Clients have 24/7 access to the Client Portal to see for themselves how much they have earned in any one period (updated weekly).  We feel this is far better than sending a rental income report that our clients are not ready to see or use.  At the end of the year, their 1099 will match the data they have been seeing all year.  This will permit them to make IRS quarterly deposits.

The State of Mississippi collects sales and guest taxes for local communities.  Christies registers all of our client’s properties with the state.  We report monthly at the Department of Revenue website on your behalf.  If all revenue is from third parties, we check the boxes.  

If Christies received a booking through our website, we collect sales tax and remit it in the report.  The entire process is completed and you can rest assured if there is an audit, we are here to help.

Gulfport Beach at Sunset

Guest Guide is customized for your property

Our Guest Guide is another feature.  We want our guests to know everything about the property including its history if any.  This document is comprehensive and includes not only all of the rules (HOA also) but how to use things.  WIFI code, parking instructions, and any regulations that local authorities require to be passed along.  Listings of local restaurants, stores, and churches are included.  

The Guest Guide is customized for each client’s property and our clients are involved in its creation.

Cleaning is a necessity so we manage the cleaning process.   Brian our manager makes site visits to be sure that properties are ready for the next guest.  The Guest onboarding process is something that Brian takes very seriously.  He communicates with each individual on the day of arrival (also before).  Brian responds quickly to guest requests.

Suggestions such as securing wall art

​We meet with prospective owners at the property and walk through the property. We take this opportunity to explain our vacation rental management process. Often even experienced owners can benefit from our advice about various things such as how to secure wall art, fix beds to the wall, wifi thermostat, and much more.  After years of experience with guests who are hard on properties, we have found some solutions to prospective problems.  

Christie will for a fee, completely set up a house, condo, etc.  She acquires all of the furniture, furnishings, and kitchen items, and even decorates often creating her own art.

Part of our service is to recommend such things as twin beds, picnic tables, the best ways to decorate, and much more.   We recommend the correct sleeping configurations for the maximum return on your investment (and consider HOA

Coastal Cottage Guest Book vacation rental management
Guest Guide

How much can I earn from my vacation rental?

Adding two full beds for example instead of a queen bed will sleep two more.  Brian and Christie provide excellent service to our guests and clients.

Christies is not just a vacation rental management business, we often manage the sale of our client’s vacation rentals or help a client find a property for a vacation rental.  One of the key things we can offer in this process is knowledge of short-term rentals and their activities.  A question often asked is? “How much can I make from my vacation homes?”  This would be difficult for many but it’s not hard for Christies.  

We use existing client data to extrapolate.  Not only about the total income but the details such as how often it will rent.    As a rental company, it’s our business to know about rates and occupancy.  If you are planning on buying a rental property as an investment property or for personal use, you need data.

Consolidated calendar Christies Gulf Beach Rentals
Consolidated calendar

Christies offers knowledge about vacation management

Property owners need all of the information they can get to make decisions such as: “Do I keep it or sell it?”, “How much will I need to save from earnings to cover slow periods”?  Rental properties are all different, even when they have the same floor plan and are part of a large condo group.   Christies Vacation Rental property management services can help you manage your property as a business.  

In addition to rental management, we offer additional services including:

  • – Creation of an LLC 
  • – Quit Claim Deed of to LLC
  • – Accounting services
  • – Utility and bill payments (for those who don’t want to do anything)
  • – Landscaping (bi-weekly, monthly lawn care)
  • – Manage major repairs
  • – File permit requests and addend city meetings

The management fee

About that management fee.  You will need to contact us about this.  I can tell you that our fee is a fixed percentage of the gross income after deducting cleaning and HOA fees.  Christies gets 100% of the cleaning fees.  We do charge a minimum of $100 in any month where the income falls below $100.  

This minimum fee which should be a rare occurrence is to compensate us for visiting the property to make sure it’s still there, in good condition and the pipes did not freeze in the winter.  Our fee is very competitive.

We do not ask for a security deposit or any other type of deposit for our clients.  We do charge a small start-up fee to manage the free photos, create your webpage, guest guide, program doors, thermostats, etc.  As I said, it’s very reasonable.  All property managers charge a set-up fee.

Sail boat regatta
Sailboat Regatta, Ocean Springs

Your income

Time to talk about your income.  Don’t get excited, there are no specifics here, every property is different.  You should know that your rental condo will be busy sometimes and not other times.  For example, Mardi Gras is popular on the Mississippi Gulf Coast so you may expect to earn more during that time.  

That perfect vacation may take place during Cruzin-the-Coast for example when rates are much higher than at other times of the year.  You would think with all of the local casinos on the Mississippi Gulf Coast that people would want to stay there.  They do but many also want a beautiful condo or house within easy walking distance of the beach.  A place where the entire family can have fun.

Our Coastal Cottage property is within walking distance of the beach and is one of several beach houses that Christies rents.  I have a fire pit and a large yard.  This is perfect for a larger family that wants to enjoy their rental home and the sea breeze.  

Mississippi Gulf Coast pond
There is more than beaches on the Mississippi Gulf Coast

Having many properties – more opportunities to rent yours

You may have a condo with great views and an outdoor pool.  And of course, all of our properties have access to beautiful beaches.  Sometimes we receive requests to accommodate a couple of dozen or more.  This allows us to fill several clients’ properties at one time.

Other times when we receive last-minute calls for a property that is booked, we can move the new guests to another property.  On occasion when all of our properties are fully booked, we coordinate with two other property owners who have several vacation rentals they manage on their own.  

This coordination works both ways and helps find homes for our visitors.  In the end, we want our guests to have the best vacation and our owners to earn a great income.

Social Media

In addition to the Christies Gulf Beach Rentals website plus Airbnb and VRBO, we post on Facebook and Twitter. Every new blog article is posted along with some blog articles about the Mississippi Gulf Coast posted on RetireCoast.com and Logan-Anderson Gulf Coastal Realtors. This keeps our sites active.

All new properties are posted on social media sites to draw attention. We encourage all of our clients to post their property on their social media websites.

If you are interested in having Christies Gulf Beach Rentals manage your property please reach out to us. Click on the button below and complete the client interest form. Click here for more information about property management

Owner interest form
William Anderson Beaches, Gulf Coast, Property management, Real Estate, Vacation Rentals

Internet property managers can cost you big now

Thinking about renting your vacation home? Before you reach out to high-tech firms located in a San Francisco highrise office building with a view of the wall. Consider a real local property manager. You need boots on the ground. How do they drive by and check your property? Who responds when the police are called because of noise? Locals are best for managing your vacation rental property.

Several tech-based start-ups claim to have a national reach for vacation property management. Why work through a third party? Go directly to a property manager in the area where your property is located.

Vacation home in Gulfport MS locally managed
Vacation rental Gulfport MS locally managed

Regulations in some cities require a property manager to be located in the same city or at least within x miles of the property. Some vacation rentals have created a bit of a negative reputation and some cities even discourage vacation rentals even when they are currently allowed. All good reasons why locals are best for managing your vacation rental property.

I would like a local property manager

I recently spoke with a prospective client who is just completing a renovation on a property he purchased to place on the market as a vacation rental. He called around and we were the first to call him back. He also told me that the others were not located in the area and he wanted to deal with a company that was local to his property. This makes sense for so many reasons, let me illuminate a few.

If the property were to be flooded or damaged in a hurricane, who will advise you? A good local property management company can help you get the property back on the market. We make it our business to know people at city planning and other offices responsible for issuing permits. These relationships are important.

Should the police department call us for one of our clients, they know we will respond without hauling everyone off to jail. Sounds silly but this is true. Some of our principals know many police officers and this allows us to escalate issues with neighbors. Another reason why locals are best for managing your vacation rental property.

Have you obtained your short-term rental license?

Yet another new client contacted Christie’s to discuss a changeover from the big tech company. A large party took place at their new house and after thousands in damages, they decided to make a change. The police were called and there was no property manager to be found.

As it happens this property is located in one of the cities along the Mississippi Gulf Coast that require a property manager to be located in the area. The biggest potential problem was that the big tech property manager failed to tell the owner that they needed a local permit. The permit comes with fees of $750 initially. Failure to obtain the license and pay the fees to subject the property owner to large fines.

Christies stepped in and as part of our management agreement, we help the property owner with the application and submit it for them. The fire department may inspect the property and Christies will be there to let them in and answer questions. This is one area where a property manager is critical. if the fire department finds something wrong, they can suspend the permit days before a guest is to arrive.

Cleaners are not property managers or repair contractors

Many of the companies that operate the boiler rooms and claim to be your property manager find maid services in the area to clean the property after it is vacated. Often these are larger companies hiring lists of people. The same cleaner may not come to the property more than once. Our property manager works with independent contractors who are assigned to the same properties all the time.

Cleaners are not contractors meaning that they do not make repairs. Meaning that the distance property management company will have to find a local maintenance company to make repairs. I can tell you from experience a good handyperson is very difficult to find and keep. Distance companies will have to call larger contractors at more expense to you

Local property managers have their “guys” (no offense to all of the other genders) who are essentially on call when something goes wrong. The AC person we use is extremely reliable and will often be at a property and have it repaired within an hour. This person can diagnose almost any problem and find a cure quickly.

Zoning map of Long Beach MS sowing zones where vacation rentals are permitted
Zoning map City of Long Beach, MS

Local relationships

As mentioned above, in our business which is property management along the Mississippi Gulf Coast, we know many elected officials and this is a good thing. The subject of vacation rentals comes up often at the City council and planning department meetings. The local government can either allow your rental property to be there or they can cause you terrible financial harm.

We and other locals keep in touch with decision-makers and staff to be sure our clients are well-represented when the topic of vacation rental comes up. Recently in one city, there was a vote to change some zoning to permit more vacation rentals. The results could have affected our clients. Would your long-distance management company know this?

Managing your property is not just about getting exposure on third-party websites such as Airbnb or VRBO, it’s about many things such as keeping the property well-maintained and providing excellent on-site customer service.

Property owners should have a direct relationship with the local property manager

Our property manager has regular and frequent communication with our property owners. Yes, we offer a turn-key approach so that the owners are not needed on-site. Owners are not involved in disputes or maintenance issues other than to approve expenses. A good property manager can make all of this happen without a hands-on approach by the property owner.

On the other hand, the property owner wants to know the people that are putting their hands on the property. They want to speak to the manager who just checked out a reason for a high water bill for example. Why would you want to call someone in Seattle about your Mississippi Gulf Coast property?

Vacancy rates are up

The economy is slowing and vacancy rates are up particularly in the slow season. High seasons see higher occupancy rares with people coming and going. This keeps the bad element away because the properties appear to be occupied. What happens in the off season when your propery may go for weeks without guests? This is an open invitiation for someone to break in or for someting to fail e.g. water leak.

Who goes by and looks at your property when there are no guests? That corporate computer has no abilty to visit your home. Yes there are security systems but they do not see that rodents are eating inside, wasps are building a large nest or there is a gas or water leak. Only an on sight property manager can do this for you. Something to consider.

If you are not now a rental property owner and are thinking about it, please read some of the relevant articles on the RetireCoast website and the Logan-Anderson, Gulf Coastal Realtors website. You may want to read this article on our Christies website

Contact us if you are interested in property management along the Mississippi Gulf Coast.

William Anderson Gulf Coast, Income property, New Property, Property management, Real Estate

Best way to profit from renting my vacation home:2023

What is the best way to make a profit renting my vacation home? To start, you can buy a property on the basis that you will stay there periodically but it is primarily for rental. Or, you can buy a home that is truly your vacation home and you just want to earn some money when you are not in residence.

The difference here is subtle but important. Some people look for a home that suits their style and they decorate it for their purposes. These people may use the property multiple times per year and for longer stays. Others just want a place for the occasional weekend and they would like it to pay for itself and possibly make a profit.

Still, others start out looking for a property that will become a full-time vacation home, and of course, that property should be profitable the first year.

Most vacation rentals are owned by individuals who have purchased a second home for vacations and decided to earn extra income to offset costs. If you already own a second home in an area that attracts visitors and are interested in earning some offsetting income you may be in luck. Renting your vacation home is something to consider.

I will expand upon this as you read on. Before getting into the second home issue, you should understand the difference between owning a vacation home strictly for earning income as a business and your second home used for the occasional family getaway with rental income supplements.

Purchasing as a full-time rental

Purchasing a property for the exclusive purpose of renting it out as a vacation rental is a completely different proposition than buying a property to use periodically (these are called second homes). You can pay cash for your vacation rental or you can finance it. If you are buying it exclusively for business purposes, you will be required to put at least 20% down and possibly 25% depending upon the lender and the property.

One of Christie’s Gulf Beach Rentals Vacation Rental Properties

If you finance, you will have a mortgage which along with taxes, insurance, maintenance, management fees, utilities, and other costs must be offset by income. Very few properties can generate sufficient income to cover the debt and ongoing costs plus generate an adequate return on invested capital. particularly if the property is financed.

I have owned many vacation properties, some were purchased as second homes intended primarily for our enjoyment with supplemental rental income. Others were purchased exclusively as vacation rentals.

Before you attempt to buy a property exclusively to rent it, consider the costs and weigh the income/loss against the use of your money elsewhere e.g. stock market. Aside from risks, you may be better off placing your money in other investments. Run an analysis to make this determination. Our real estate broker partners can walk you through the analysis with their exclusive KEYLADDER property investment system.

Paying cash is one strategy, and OPM is another

If you pay cash for your business vacation rental, you may turn a profit. Depending upon your ongoing costs e.g. taxes, insurance, maintenance, HOA fees, property management, fees, etc. Without mortgage debt, the picture is vastly different.

On the other hand, paying cash reduces your return on investment. Leveraging is the best way to obtain investment property. Your ROI will be higher since you are using other people’s money and your guests will pay off the mortgage. Again, this may not work for most properties even in ideal settings if the cost to operate can not be overcome by higher rental income.

Back to your vacation home that is rented for part of the year to supplement your income or reduce your costs. Frankly, this is the very best way to own a vacation rental that earns income. Starting with the fact that you can buy your second/vacation home with as little as 10% down. The main assumption should be that you can afford the costs of this property without any income. Start here with your math.

Example of Second Home Analysis

I was just researching to find a good example and found a newly built home one block from the beach in Gulfport, MS. The property is 1.750 sq ft with four bedrooms and two bathrooms and places to park four cars under the building. This is a single-floor building that is elevated to meet flood requirements and obtain lower insurance rates. The property is in an excellent location near restaurants and casinos.

The seller wants $319,000. I ran the data through the KEYLADDER system and found that with a 20% down payment the property would lose about $286 per month.

This means that as a second home that you can visit during the year and rent it the remainder of the year, you would be expected to pay $286 each month out of pocket after deducting the income from all expenses. Many people would look at this as a great investment. It looks better than I am explaining here when you deduct property taxes and interest payments as a qualified second home. With just 10% down the shortfall would be $443 per month.

Keep in mind that two other things are happening. The property is growing in value and the principal on the mortgage is being paid down. The estimated return on investment with 20% down is about 100% over five years. Not bad. You can see that this property is not a profitable investment on a monthly cash flow basis so I would not recommend its purchase as a straight investment if it is financed.

The hardest thing is determining the income

The hardest thing for a buyer of a second home who wants to rent it when not in residence is determining income. Two factors are the price per night and the number of nights per year. Prices will vary depending on the time of year.

You can take the time required to survey other properties in the area and determine what similar properties are receiving based on the season and other factors. You can also check their calendars to determine how often they are booked. Your research will not allow a look back as the calendars do not usually retain past data for you to see. Don’t be captivated by the high season income as the reason to buy your second/vacation home. Remember its peak income for a short period.

If you need the additional income that renting to others provides, avoid using your property during the high season or events. If you can afford the cost of the property without renting, by all means, use it when you wish. It’s hard to eliminate the emotional aspect of believing that your property is the best in the area and it should rent for more or rent more often. Your property as viewed by others is the key.

It takes time to build a reputation

It will take time on third-party sites e.g. Airbnb for your property to build a reputation. During that time, your rents will be lower than others with lots of reviews. You can help kick-start the process if you hire a property manager with a high status on third-party sites. People will look at a property and see that the managers have a high status and at least with Airbnb, they list other properties managed by the same company. People may find yours by clicking on those links.

Essentially, you ride the “coattails” of the property manager with a high degree of success. After a while when your property has earned high marks from guests, your property will rent more often and you can consider raising the rate. Guests want to stay at highly-rated properties and read what others have said.

Should you decide to use your second home as a vacation rental, be sure to lock up everything personal that may get broken or disappear. We recommend putting a lock on a closet door. This is also a place where the property manager can store linens if yours are used for guests.

The grounds should be kept in great condition. You should contract with a gardener or through the property manager to ensure that your grass is always looking good and weeds are pulled and plants are tended to. If you live in an area that requires watering, install an irrigation system.

How much of the year will my place be rented?

People ask, how much of the year should I expect my property to be rented? There is no magic formula. Every area is different. The best that can be said here is that if your property is located very close to tourist areas it has a better chance of being rented more often.

A good example is a 3 bedroom, 2 bath house that is within a block or two of the beach. This property would usually rent more often than properties a few miles from the beach or even a few blocks further away. Walking distance is important.

Swimming pools are great in areas where people expect to spend warmer days e.g. the South or West. Properties with pools offer more amenities than a condo without one for example. As mentioned above, the key season will generate the highest amount. Shoulder seasons will generate some income and low seasons will probably not generate sufficient income to cover costs.

If you are considering buying a property for a second home and renting it when you are not here or renting a property you already own on the Gulf Coast contact us. We would like to manage the property for you. Christie’s can also put you in touch with our strategic partners which include Logan & Anderson Gulf Coastal Realtors to help you find your dream second home.

We can help you create a budget and determine an approximate income for the property you desire to acquire. As mentioned above, very few properties will earn enough as a stand-alone investment to cover all costs if the property is financed. Should you desire to create a vacation rental as a stand-alone profit center, we can assist with a list of items you will need and the approximate cost to set up a property.

Second home tax deduction vs a business

A few list items. You will be able to deduct the mortgage interest and property taxes as an investment or a second home. Consult your CPA for the impact on your tax obligation. You may be able to deduct some costs associated with the property such as insurance, maintenance, and even periodic travel to the property. The benefit will depend upon your financial situation so again, seek help from your CPA.

Should you decide to purchase a second home and use it as a vacation home and also rent it with the intent of later retiring in the property, there are some great tax benefits to consider. As a full-time resident living on the property, you can receive a homestead deduction. If you are over 65 there is a larger deduction that is quite beneficial in reducing your property tax bill. Your CPA can discuss how to convert a second home to a permanent home if it was rented.

Keep in mind that non-residents must pay a tax when their vacation property is sold in Mississippi. If you decide to move here and have established residency here, you can sell your vacation house without paying that non-resident tax. Yet another reason to do some planning with your CPA.

A suggestion you may want to consider. Stay at a vacation rental or two or three in an area you like. Regardless of whether you are going to buy for your use or full-time income property, get a feel for the area and talk to professionals who manage vacation homes. Here comes our advertising.

Consider taking a course on investing in short-term rentals

If you plan to invest in short-term rental property consider taking the KEYLADDER Short-Term Rental Investment course. This course will take you through every aspect of investing in a short-term/vacation rental property. The cost of the course will be earned back many times over through the unique information provided. Click here

free Mini-course short-term rental investing

Gulf Coast Property Management can manage your vacation home and help you achieve your goals of earning income on that property. We can also fully set up a property that you have purchased from acquiring furniture to decorating. We offer turn-key solutions to people who do not reside in the area but who want to be sure that their property is well cared for.

Christies Gulf Beach Properties is the marketing arm of Gulf Coast Property Management and your property would be listed on the Christiesgulfbeachrentals.com website and VRBO and Airbnb and others as part of our program. Or if you just want someone to keep an eye on your vacation home when you are not there e.g. having the lawn cut etc., we can do that too.

Contact us through this website or call 228-215-3234 if you are interested in working with us.

One last point, if you are looking to purchase a property, please consider using our Real Estate sponsoring agency Logan-Anderson, Gulf Coast Realtors. We will work with them on a smooth transition from purchase to set up. Contact Bill Anderson at Logan-Anderson at 228-215-3234, he and Sean Logan are experts at finding vacation rental properties. Bill owns several that we manage for him.

William Anderson Income property, Property management, Real Estate, Vacation Rentals

Why not live on the Coast?

You have decided to spend your vacation or getaway weekend or holiday. You like they are for all of the great things to do, the fantastic food, the events and yes, the beach. Perhaps you have visited more than once. You may not know that the Mississippi Gulf Coast is one of the most affordable areas on or near the water in the entire country.

Not only are our property values far lower than in most other areas, according to several sources, but Mississippi is also the lowest-cost state to live in. Look at the price of gasoline on any one day. Compare to where you live. Our cost for power, water, and even property taxes is at or lower than most other areas. How about the fact that Mississippi has a 7% sales tax and 5% on the purchase of vehicles?

Income taxes are among the lowest in the nation. If you are over 65, there are zero state taxes on any retirement income including withdrawals from IRA and 401k. Where there are a few states with zero state sales tax, you can bet that your state income tax cost after age 65 will favorably compare with those zero income tax states.

Senior property tax discounts are big

If you file for your senior property tax benefit, your tax rate could be as low as 1/2 of 1%. Compare the difference in property tax along the Coast to what you are paying where you live.

I could go on and on about the benefits and lower costs but that’s not the only reason to move here. You already know why you should consider moving here. You like it here, that’s why you have visited. If you are a reader who has not yet visited, you are in for a surprise. Let me explain.

Florida and many other areas along the coastline are full of high-rise buildings that block the view. Congestion, traffic, and high cost of living make those places acceptable to visit but not to permanently live there. The Mississippi Gulf Coast is a hidden gem. Our beaches are not crowded. With more than 40 miles of white sand beach, you can spread out.

Low density population, no traffic helicopters

Our area is one of low-rise buildings. Yes, there are a small handful of large condos but they are few and spread out. The last one was built over a decade ago. The area is not densely populated. About 420,000 people live in three counties that are about double the geographical area of Orange County CA which has a population of over 3,000,000.

We have no traffic helicopters. Did I mention we have 12 casinos? Even if you do not gamble, the casinos have great restaurants and entertainment.

Come visit, enjoy yourself. If you would like to see what is available go to Logan & Anderson, Gulf Coastal Realtors, and check out homes available through their website. FYI, you can buy a home pithing walking distance of the beach for as low as $250,000. If you want to live a bit further from the beach, you can buy a new home for less than $200,000.

William Anderson Gulf Coast, Real Estate