Tech-First, Hassle-Free Tenancies: Realizing Real Margins for Your Short-Term Rental Strategy
There are some significant distinctions between an investment and a business endeavour. To be successful in an endeavour, you need to put in some mental effort, make a time commitment, and have a healthy dose of good luck. A well-constructed investing plan includes a symphony of risk, reward, and diversification that provides regular and predictable returns; at its finest, it’s like having a favourite song playing in the background as you work.
One of the most valuable post-COVID portfolio additions is real estate that is rented out on a short-term basis. Travelers, those who have been displaced and are looking for a new home, and renters who are disgruntled with longer-term leases have all contributed to the high level of demand that has been sustained. And because prices that are higher than average are being absorbed at occupancy rates that are significantly greater than the norm, the market for short-term rentals has significantly outperformed the market for traditional real estate.
Investors should be able to look forward to retaining excellent margins even as the new normal continues to take shape and all signals point to ongoing returns. However, investors who are unable to effectively manage their manual labour will discover that they are involved in a time-intensive enterprise rather than a financially rewarding investment. If the appropriate technology investments are made, short-term rental methods have the potential to work in the investor’s favour. However, in the absence of processes that are abstracted and automated, investors will quickly find themselves working for their rental.
Let’s take a comprehensive look at the hosting workflow to see how the appropriate application of PropTech can help to ensure a short-term rental that is a completely hands-free investment.
Marketing, Sourcing, and Guest-First Conversations
Finding leads, improving property listings, and guiding prospective guests through the booking process can soon build up to a workload that is nearly equivalent to that of a full-time employee. However, solutions based on proptech can conduct these procedures even while the investor is sleeping. With the use of integrated portal services, owners are able to connect their booking sites to their own domains and mark them as their own. Each listing has the ability to be integrated with marketing systems such as Google Tag Manager, Facebook Pixel, Facebook Hotel Catalog, and so on in order to collect additional analytics.
Deep learning technology can be used to examine the activity on the market and make recommendations for the optimal, seasonally-adjusted price as well as the optimal duration of stay for the property listing. Listings are thus able to be modified across numerous booking platforms to appeal to the greatest number of customers. In addition, developments in the PropTech industry have made it much simpler for investors to implement dynamic, pre-determined pricing criteria into their channel manager. They are able to easily manage bookings and set availability across all of the major sites, including Airbnb, Zillow, and Booking.com, amongst others.
The following step is to engage the guests with individualised communications. PropTech makes it possible for investors to access their control platform from any location, providing and cancelling tenant access codes as tenants go through their stay in a property. The safety of both parties is ensured through virtual online check-ins as well as facial recognition technology. Property managers, cleaning crews, and maintenance crews are all subject to the same access control; owners are able to hand the key off to one another without ever physically being present.
Recent advancements in the field of property technology have made a number of previously difficult tasks considerably simpler, including the management of temperature and security, as well as the provision of control over connected home appliances.
Optimizing Data—An Investor’s-Eye View
According to Emir Dukic, CEO of Rabbu, “PropTech that improves our use of data will be the value-add that we’ll soon be unable to imagine ever having lived without.” This prediction was made by Dukic. For investors interested in purchasing properties for use as short-term rentals, Rabbu provides a turnkey rental platform. The phrase “adjusted data and smarter analytics can supercharge an investor’s decisions” describes exactly what it sounds like.
There are now new products available on the market that can assist investors in quantifying each and every aspect of short-term rentals. Rental property calculators that are offered at no cost can mine a local market for current, relevant data on properties that are comparable to one another. Access to those numbers can help investors plan their next property acquisition and optimise their existing listings. They are able to gain an understanding of how well short-term rental properties are doing in particular regions, as well as which sizes and types of properties are performing better than the others. Investors can view the revenue and occupancy rates of surrounding properties, along with detailed assumptions, simply by inputting their address. After that, they are able to adjust their performance expectations and make better marketing decisions in order to list their properties in a manner that is competitive.
When owners have an integrated portfolio, they are able to observe how the decisions they make ultimately pan out. They have access to all of their financial statements in a single location, can monitor how far along they are in the onboarding process, and can monitor how their net operating income shifts across their various investments.
Because of the aforementioned solutions, the management of short-term rentals no longer requires two non-renewable resources: time and mental energy. The process of listing properties, making performance projections, and measuring impacts no longer requires any element of guesswork thanks to improved data availability, smarter analytics, and optimised visibility. The need for the investor to be physically present is eliminated when solutions in the areas of marketing, access control, and guest relations are implemented. Guests can be cycled through the property, turnovers can be staffed adaptively, and management professionals can be compensated without any involvement from the owner. That is the appropriate level of involvement; by reducing the amount of time and mental effort required to maintain a short-term rental, investors will discover that their short-term rental strategy is an incredible source of market return, portfolio diversity, and long-term financial freedom.