Second homes have a lot of unused capacity. Lots of people have condos on the beach or cabins on the lake. Most of the time, these furnished homes sit unused and empty.
Services have popped up to help homeowners rent out their vacation homes. You’ve probably seen them…
Websites like Vacation Rental By Owner (VRBO) and Home Away, provide a way to list your property for short-term vacation rental. (As an aside, VRBO and Home Away are really the same company.)
Then there’s Airbnb. Airbnb has a wider focus, allowing you to rent out practically any kind of real estate, from an extra room in an apartment to a mansion in Beverly Hills. Airbnb is for short-term rentals, but not limited to just vacation property.
Property Management is ‘Evolving’
Many vacation property owners are not great landlords. When an owner turns to sites like VRBO and Home Away, or Trip Advisor’s FlipKey, they need to spend quite a bit of time marketing and managing their listing.
In order to fill up that vacation rental, there are quite a few steps:
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Writing the ads
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Joining the sites
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Marketing the ads
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Answering questions
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Managing bookings
It’s definitely a lot more work than running a traditional, long-term rental property. Many homeowners don’t want to put up with the hassle.
That’s where a company called Evolve Rental Network has stepped in. They will manage everything – all the advertising, inquiries and bookings for the homeowner. The homeowner just needs to maintain the property.
When a vacation homeowner calls Evolve, their rep will have an interview to learn about the property. The homeowner will then submit photos. Evolve will take all the information and create ads on all the major vacation websites.
The ads will contain Search Engine Optimization (SEO) friendly keywords that will help rank the homes on the vacation sites. Evolve will also do A/B split testing of different ads.
A/B split testing is where you place two slightly different ads (ad A and ad B) on the internet with a way to track the response to each one. If one ad creates a much bigger response than the other one, marketers will run the ad with the bigger response and trash the other one.
Once the inquiries start coming in, Evolve’s team will take the phone calls, work with the renter to book the property, and fax or email back and forth all the required documents.
Evolve estimates that vacation homeowners spend about 9 hours per week managing their vacation rentals. By outsourcing the advertising and booking, it’s like a vacation rental owner getting an extra day off a week.
It also allows Evolve to run lots of rental properties from their central Denver-based location. They don’t have to be the boots on the ground property management company that is the traditional model.
Of course, Evolve does want to help property owners in any way they can. Although they can’t be at the property, they can recommend other companies and services to help a property owner become more hands-off with their rentals.
Mostly those recommendations are for housekeeping and maintenance. Then again, is there anything else you need in terms of services to run a vacation rental?
The formula seems to be working…
According to their website, Evolve has 2,000 vacation homeowners signed up, and they’ve booked over 60,000 guests in 300+ destinations.
What Will this Service Set Me Back?
If you list with Evolve, you will not have to pay the fees associated with a vacation rental site. If you did the rental on your own, you would have to pay these fees. As of the writing of this lesson, Evolve has compared the prices for renting a vacation home on the various vacation sites:
Instead of the vacation site fees, Evolve will charge a fee equivalent to 10% of the rental amount. There is no long-term commitment to work with Evolve, and no up-front fees to join.
Evolve’s price is about the same as what you would pay a traditional property manager. Traditional property managers will also tack on the maintenance and cleaning fees. Some of them will even mark up those fees.
The business model of Evolve seems like it works much better with vacation rentals instead of traditional long-term rental property.
Who knows… in the future, we might see an alternative to Evolve that services more long-term rentals.
The basic idea is simple, though. Save time and aggravation. Maybe there is a Mogul member out there who can do the same for traditional rental managers?
Whatcha Think?
Tell us about your experience with Evolve in the comments section below.
Investigate Vacation Rentals – There are people out there making good money through vacation rentals. Should you be one of them?
Outsource – ‘Do what you do best. Outsource the rest.’ Concentrate on doing those tasks that make you the most money.
Learn More About Testing – Try different types and methods of advertising for your rentals and flips. See what works best. Learn more about A/B testing.
JP Moses
is a real estate investor in Memphis, TN, with experience ranging from land lording to note buying, rehabbing, and wholesaling. However, wholesaling is the area that he enjoys most and where he bring the most experience and expertise to his students.