Chapter 6______________________________Step 2 ....…  · Web viewSuddenly I realized that doing all of the housekeeping and guest management myself was ... of software and/or online

Chapter 6______________________________

Step 2 – PartnerLeaving the Do-It-Yourself

Stage

The first property I listed on Airbnb was a room in my apartment. It was small but nice, and it stayed occupied and generated a nice income for me. It really wasn’t a lot of trouble

to manage it, deal with the guest inquiries, then clean it up after they left.

I was doing everything, cleaning, restocking, changing bed linens, doing the laundry, all of the stuff that has to be done between guests. It was working well for me until I added my second property listing. Suddenly I realized that doing all of the housekeeping and guest management myself was taking up more and more of my time. The profits were nice, but there was no time to enjoy them.

I realized that taking on partners was how I could leverage my time and effort. Not partners in the business, but partners in making it

function efficiently. There is simply no way that you can do everything and grow your business.

There is only one “you,” and you need to get past the “savings” thinking and move on to the “making money” thought process. While you can clean units yourself, saving $60 or $80 per stay is saved, but how many properties will you miss and not add to your listing portfolio because you’re too busy mopping floors?

Start evaluating tasks and business functions as to whether they are the highest and best use of your time. In most cases, you’ll find that they are not. Your time is more valuable in adding to your listing inventory and managing partners in the daily processes necessary to keep your business functioning smoothly. It’s all about working ON your business instead of IN it.

This is at the top of our list for good reasons. None of your other service partners will have

more contact with you, owners, and guests than your housekeeping and cleaning service.

They will be in the properties after every checkout, will at times interact with guests, and they will be responsible for following your detailed instructions and housekeeping services list to assure guest satisfaction. They will also be reporting any damage or other issues immediately after a stay, which can be quite important if a deposit may need to be tapped.

Choices for Housekeeping Services

You have choices as to the type of company or even an individual that you’ll be using for your housekeeping services. Your choice should carefully consider certain characteristics of each business type:

Chain or FranchiseThe chain or franchise operation will be

staffed up and able to scale up with your business. A company that may work well with five properties may not have the ability to grow with you to triple or more that number of rentals. You’ll usually find a higher price point,

as they have more business infrastructure and possibly franchise fees to pay as well.

Private CompanyIf you can find a private company that does

short-term rental cleaning, they can be a good choice. Often you can negotiate a better deal with them, and they can be more flexible when it comes to asking them to do things they do not normally include in their services, such as linens and towels. You are also working with a local owner without franchise rules or policies that may keep them from meeting your needs.

IndividualOfen it is tempting to work with an individual

or family cleaning business, as they often are very accommodating about adapting their services and do a great job. The problem is that they are usually not going to be the best choice to scale with your business. They will not be able to grow as fast as you will be adding properties. Any failure to meet your schedule for changeover cleanings will create problems and poor reviews for you.

Requirements for a Great Cleaning Partner

Before you set out to locate and interview cleaning partners, put together your “interview sheet” or qualifications required and be sure to ask all of the right questions of every prospective service.

Give them a list of the services you’ll need for every property.

Include linens and towels, and bath consumables, as many will not normally provide those services.

They should have experience with STRs, Short Term Rentals. They should clearly understand that all normal cleaning services must be completed between check-out at 11 AM and check-in at 3 PM.

They will also be handling inventory and restocking of items like your free wine, water, and mints.

The company should be willing to grow, scaling up with your business growth. You do not want to be shopping for new housekeeping services because you outgrow them.

They should provide references and allow you to check them out.

Be consistent with every company, asking the same questions and sharing the same information.

Negotiating with Comparable Services

Once you have a short list of companies, it’s time to negotiate to get the best price. That’s why being careful to have a comprehensive description of what you want to be understood by each of them.

Also be very clear that you’re seeking a long-term relationship with growth as the goal. Emphasize the potential for a lot more business as you grow your listings. Remember too that everything is negotiable.

As you get competing bids, you can keep going back to the companies, telling them you have a better competing bid, but wanted to give them a chance to bid again, as you are seeking a long-term partner.

The lowest price isn’t always the best, so balance price with the company, ownership attitude, and willingness to do what you want and grow with you.

Scheduling is Critical

You’ll probably find that chain businesses and larger private firms will have some kind of software and/or online system to allow you to schedule cleanings, cancel when a booking is cancelled, and get reports of completed cleaning visits.

One of our primary goals is to be able to manage our growing business in just a few hours each week and do it on our smartphone or tablet computer. If the cleaning company doesn’t have a solution or it falls short, there are others you can use. You will want your chosen company to agree to work with you in getting the communication working between you, Airbnb, and the cleaning personnel.

This is a screenshot from an online scheduling solution at ServiceCEO.com. It allows you to schedule and cancel cleanings as necessary, and it allows the cleaning service to post completions. It’s a scheduling solution that can be used for different business types.

Another online solution created specifically for collaboration and scheduling between hosts and cleaning crews is at GetProperly.com. Hosts can take photos and place icons to specifically indicate services, such as a photo of a wine bottle in place, which is a gift I provide to guests. Images can be used for your list items to clarify what you want, and cleaners can take

photos for upload that show what they’ve done or conditions they may find on the property.

Whatever you use for scheduling, it must make it fast and easy for you or your front desk partner to keep up with cleaning schedules to be certain that the work is done within the time frame you need and your guests arrive at a clean and restocked property.

As you become familiar with Airbnb and working with guests and their inquiries, you’re going to find out that handling your own front desk tasks and communications will quickly become all you have time to do.

Visualize going out with the family or a date to a movie and getting a vibrating text that a guest must have a question answered before they book a reservation. You have to excuse yourself and go outside to handle it. Or, it could be at a nice restaurant or pulling off the road when you’re driving.

Before you take any of the actions in this Front Desk section, you should take these communications, bookings, and inquiries yourself for a while to understand how it works and the many questions guests will ask before and even after they book. This is the only way you can set up a reliable front desk automation system to handle them without your involvement.

Once you have a feel for the way Airbnb works and the ways in which guests interact with you, it’s time to set up with a front desk service to take care of all of this for you. There are a number of them out there, but I use Guesty.com. I’m not referring them, nor do I get anything for this mention. However, this service works well for me and takes almost all of the daily communication and booking functions off my plate.

Think of all of the things a front desk at a hotel does for guests, and you’ll need to do much of the same. Guesty will take care of most of this for you:

Booking inquiries & reservations. Changes & reservation calculations. Questions before and after booking, as

well as during the stay.

Sending automated messages for repetitious questions & booking notifications.

Those automated messages involve reminding guests of their coming stay a day or other period before arrival, as well as checking with them after they’ve checked in to make sure they have arrived and found the property to be as expected.

There will be other automated messages and responses you’ll want Guesty to handle, and as you operate your business, you’ll be constantly adding to them and your preferences as to the way to respond to questions about discounting or checking in early, etc.

Guesty’s current fee is 3% of the booking amount, and I’ve found it more than worth it. 95% or more of the interaction with guests is off my plate, and I can enjoy life while satisfying guests and getting great reviews on Airbnb. All of these messages and responses are signed with my name, so the guest thinks they’re communicating directly.

Guesty can also handle your cleaning scheduling for you, including cancels when a booking is canceled. Using the Guesty Staff

Management App, your cleaners are kept informed of check-ins and duration of stay so that they can arrive during the hours between guests to clean and restock the property.

As you grow your business, this service becomes ever more valuable.

One of the selling points I use with owners to get them to lease to me is that I’m going to take some of the maintenance and light repairs off their hands. I’m not talking about major appliance repairs or things like that, but more minor things.

A real example was a guest reporting a loose floorboard. I got a maintenance person out there within an hour, and it was repaired in under ten minutes. That’s great guest service that gets great reviews, and the owner, when told, was thrilled that I took care of it.

I also use the maintenance person to move furniture when staging a property when first

listed. For this reason, this person must be able to do some heavy lifting now and then.

You don’t want to take on an employee, so you’re contracting someone on a part-time basis, and they must have their own tools and transportation. You need someone who can respond at any time and do so within an hour or so.

It is true that you can hire one of the advertised home handyman services, but you’re going to pay significantly more than hiring someone who can do the work and needs it on a part-time, flexible hours schedule. You want someone with experience in general light handyman repairs around the home and the tools to do them. It’s also best if you get someone with enough technical skill to set up an Internet modem/WiFi router and a smart TV, as you’ll be putting these in your units.

You want to get someone who is willing to work by the hour, not charging a service call, as you’ll save a ton of money.

This is the sample of an ad I run on Craigslist to locate maintenance people. You’re not guaranteeing them a specific amount of work, just an hourly rate. It will surprise you how many people who will reply and are willing to do this work for $12 to $15 per hour.

For minor supplies and repair materials, once I found someone I liked, I provided a prepaid debit card with a $100 balance. They simply charge their purchases to the card, providing a receipt to me by the property to get reimbursed.

Of course, all of this business revolves around the Airbnb site, so we can’t skip them here as a partner. Here is an overview of the services Airbnb provides for hosts in booking and managing their properties:

Booking

Airbnb takes the reservation booking directly from the guest. The length of stay is verified with the guest, as well as check-in and check-out dates. Changes requested by the guest are also handled.

Calendars

Airbnb maintains the calendars of property bookings, showing booked and available days, and the host can access those at any time. You may want to offer a special deal to fill days that haven’t been booked to maximize monthly revenue.

Payments

Airbnb handles the entire payment process. They process the guest credit card, collects the money, then disburses it to the host upon successful completion of the reservation. In doing so, they also collect any other fees you require, usually the cleaning fee.

Tracks Earnings

Your earnings are tracked and reported for each property, allowing you to check at any time to see the amount of revenue you’re bookings for a property. Their reports allow you to maintain a clean accounting system by property and help you to analyze income and adjust pricing.

Suggested Pricing

Airbnb is tracking data for every property in the area, and will sometimes suggest pricing to maximize bookings and revenue.

Customer Service & 800 Number

Hosts with questions or problems can reach a person toll-free, and the wait isn’t very long in most cases. They provide excellent customer service in helping you with problems or just procedural questions.

$1 Million Host Guarantee

It isn’t insurance, but Airbnb guarantees up to $1 million to owners if their property is damaged by guests in an amount more than the security deposit. It’s a nice selling point when you’re talking to owners.

Marketing & Advertising

I saved this until last, but it is perhaps the most valuable service they provide. The Airbnb site displays your listing in guest searches and gets the photos and features/amenities in front of them to help them make a booking decision.

And, all of this for a fee of only 3%!

Hosts/owners are only charged 3% of the booking fee for these services. Another fee is charged to guests to meet the revenue needs of Airbnb.

Whether you call them owners or landlords, this group of partners are necessary if we’re going to operate our business without having to buy properties ourselves.

So far in this book, you may be thinking that this is looking like a great way to make more money on a rental property than a six or twelve-month lease, so why aren’t these owners doing it already?

It surprised me when I first started approaching owners how many of them simply didn’t know anything about short-term rentals, and many had never heard of Airbnb.

Others were comfortable with the normal long-term tenant concept and their income, as their properties were paid for and they were bringing in an acceptable cash flow without trying something different.

Others had heard of short-term rentals and knew about Airbnb. However, they didn’t know about my concepts and business systems, so it

seemed like too much trouble to jump into the STR space.

Whatever their reasons, these owners are who we want to approach with our business model and offer to lease their properties. We don’t come asking for favors. Instead, we’re bearing gifts. We:

Handle all of the STR processes without their involvement.

We lease their property long term just like their tenants have been doing.

We will provide extra insurance on their property for damage.

We will handle minor maintenance and repairs.

They now have eyes inside the property every week or sooner, instead of not seeing what the tenant is doing for months at a time.

The advantages of working with us are clear, and properly presented, they will get the buy-in from a high percentage of owners. In fact, many times I’ve been offered other properties they own once they see how I handle my business and their property.

What About a Boots-On-The-Ground Partner?

I’m talking about an actual partner in the business itself. Let’s get it straight right now that you shouldn’t look for a business partner simply because you’re afraid of jumping in and building the business on your own. You can learn from me how to start and run this business right without anyone’s help.

If, on the other hand, there are other reasons for wanting to take on a partner, what might they be?

They’re Experienced

Again, you can do this. But if you have the opportunity to work with someone who already has extensive STR experience, it may be workable to take them on as a partner, but only if you trust them.

It’s Someone You Already Work With

Maybe you’re already in business with someone and you trust them, and you would be comfortable getting this business going with them as a partner.

They Own Multiple Properties

You may have the opportunity to take on a large group of properties with one owner. They may even offer a partnership to get them all. If they’re suitable properties for STR, then it could be a joint venture type of partnership.

Finances

If you need help with funding your business, you may take on a financial partner. You may even be offered this option by a savvy investor who sees the income potential and would rather take the STR approach than keep buying long-term rental properties. They may even want to buy suitable properties you come across with owners willing to sell.

Your future as an Airbnb host is yours to control, so look at all of your options. It’s a great business model, and others will recognize this fact.

Leveraging What You’ve Learned

Now that you know the partnerships you will need to build and grow your business, it’s time to start seeking them out.

Go out and research and interview cleaning companies. Run an ad for a maintenance person. Take a look at Guesty and some of the other choices, as well as checking out scheduling solutions.

It’s time to start getting your feet wet. You don’t have to seal any agreements right