The Step-by-Step Guide to Successful Passive Vacation Rentals

Taking a completely “hands off” management approach to your vacation rentals may not be the best option, compared to using automation tools

You might see vacation rental “passive income” as the dream. Making money from your properties while doing (almost) no work? Perfect, right? Well…no. Not quite.

Completely “hands off” management by outsourcing everything to a large team may sound ideal, but in reality, it can lead to unhappy guests and leave you vulnerable to bad reviews and lost revenue.

The solution? Running your vacation rentals as efficiently and passively as possible via digital automation.

This enables you to move towards a passive income model, and reduce your workload by putting many core processes on autopilot—while still retaining just enough control and input to keep your standards high and your guests happy.

Plus, you can keep your full-time staff to a minimum, so your business stays lean even as you scale, or work to remove yourself from operations completely.

But we know it can feel overwhelming to know where to start when it comes to automating processes, and making sure your systems actually make operations easier, rather than more complicated.

That’s why in this piece we’ve:

• Started by helping you get crystal clear on your vacation rental passive income goals
• Looked at a range of ways you can move towards passive income with your vacation rentals
• Explained how to reduce your workload and take a “hands-off” management approach
• Laid out the lean, efficient team you’ll need to hire if your ultimate goal is to go fully passive

Define your goals

Defining your goals will help you decide which route to take when it comes to vacation rental management

Credit: Bich Tran / Pexels

Firstly, as a vacation rental manager or host, you want to define what your ideal goals for your business look like. Make your goals as tangible as possible.

You might ask yourself questions such as:

• Do you want to do less work, or no work at all when it comes to running your rentals?
• Are you happy to continue to stay involved in some aspects, or do you purely want to invest in the property and have another team manage the rental process completely?
• What do your ultimate goals look like, and how will you know if you’ve achieved them?

For example, do you want to be the person who manages guest inquiries and initial questions, but leave all check-in and check-out coordination, cleaning, and turnarounds to your team?

Do you want to visit your rentals once a week to check up on cleanliness and supplies, do you only want to visit physically when periodic vacation rental maintenance is needed once a quarter, or do you ideally never want to visit in person?

Are you happy for guests to contact you with questions or requests during their stay, or would you prefer for all in-stay communication to go through an assistant?

Knowing the answers to these questions will help you define how “passive” you truly want to be, and will also help you define which areas of your business you might want to automate or outsource.

Options for earning passive vacation rental income

The quickest route to passive income is hiring a property management company but this can heavily cut into your profit

Caption: Andrea Piacquadio / Pexels

When it comes to running your short-term vacation rentals passively, there are a few paths you can take, depending on time, money, and desire for profit.

Hire a property management company

There’s no doubt that the fastest way to become a 100% passive vacation rental property owner is to hire a property management company to do everything for you year-round.

Many companies nowadays specialize in Airbnb, Vrbo, or general short-term rentals, and promise to take care of everything from listings to bedding to cleaning to guest communication to reviews, for a guaranteed income every month.

Of course, the catch here is that this will significantly eat into your revenue and profit. Companies typically charge around 20-30% per booking upfront, and can also take extra management fees for cleaning, administration, or any other services offered.

If your rentals are also listed on OTAs, you’ll pay fees there too, meaning that while your operation may be entirely passive if you take this route, it may not be entirely profitable.

Build your own staff and outsource

As an alternative to hiring a property management company, you could look to create your own mini management company of sorts, by hiring a large team of specialist staff to manually manage everything.

You could hire someone to coordinate your listings and bookings; someone else to take charge of guest communication and check-in; someone else to manage turnarounds, check-outs, and cleaning; and someone else to oversee maintenance or any emergencies.

If you want to be hands-off but still take a key role, this could be an attractive option, as you can still oversee the general direction you want to take your rentals, and hire everyone else to action it.

In practice, however, this may not end up being so passive, as you would effectively be starting your own company. You would need to ensure the staff can communicate with each other and know the processes to follow consistently, not to mention managing issues such as pay, timesheets, and HR.

So while you’d be focusing on different tasks, your workload might be just as heavy.

Reduce your workload with automation

A more genuinely “hands-off” solution would be to use dedicated vacation rental automation tools to take as much as possible off your plate.

This means you can still limit your involvement and workload, but you don’t need to hire anyone to take on basic tasks (whether through a company or by hiring your own team).

Digital tools can:

• Answer initial inquiries instantly, to help secure bookings even if you’re away or asleep
• Automate and simplify guest communication, to answer inquiries quickly with minimal fuss
• Answer guest questions before they even have them, by providing digital guestbooks
• Act as a local specialist by sharing digital area guides
• Increase revenue and occupancy by inviting guests to extend their stay automatically
• Ask for constructive feedback so you can improve guest stays consistently
• Request guest reviews automatically on check-out to improve ratings and drive more bookings

Automation helps you to improve your guest experience and business success, and works even as you scale, so you can offer a better service with a minimal workload.

Here’s how.

How to reduce workload in vacation rental management

Cathy Medina, who runs the successful West Maui rental company A Perfect Vacation Rental (including this oceanfront home) says that the RueBaRue mobile app makes messaging easier

Credit: APerfectVacationRental.com

Now you know what digital automation can do for your business, let’s get into more detail on how it actually works, and how it can help you run your vacation rental operations passively but effectively.

Optimize your communications

Guest communication is one of the biggest time sucks and source of headaches for vacation rental hosts and managers.

Technologies like RueBaRue, which automate communications via text message, make it easier and faster to answer guest questions. With a team inbox and a dedicated business number, the entire team can access messages easily, enabling fast responses even if you’re not on hand to help personally.

Texting is much more efficient than face-to-face chats, phone calls, or even emails, and optimizing them via a mobile tool like RueBaRue instantly saves time and minimizes your workload. It makes operations easier for staff and more streamlined for guests too.

“The RueBaRue mobile app is great,” says Cathy Medina, owner of the successful West Maui rental company A Perfect Vacation Rental. “Employees who work remotely can go to their kids’ soccer games and just look at their phones when needed.

“The guest asks about an early check-in, our staff can quickly text the cleaners to inquire about the status of that particular unit, and then the guest gets an immediate answer. No laptop required.”

Digital guestbooks

Digital guidebooks are a great way to give guests all the information about the home and local area, without extra manual work from you or your team

Credit: RueBaRue.com

Providing digital guidebooks with a house manual and answers to common questions can help reduce guest inquiries and questions by up to 70%. Guests are sent all the information they need in advance, so they can prepare and know the answers to potential queries before they even arise.

Guestbooks can also improve guest behavior and reduce the risk of damage and problems, by including the house rules and policies—such as check-out times, or fees for broken rules—front and center.

Using a tool like RueBaRue enables you to prepare and send guestbooks automatically (and in advance) with every guest booking.

This helps make the guest more independent and less reliant on you or a team member, dramatically cutting down the time you need to spend on messaging and answering repetitive questions. It also significantly improves the guest experience, as they feel cared for instantly and have fewer frustrations.

Contactless self-check-in

Coordinating check-in and check-outs can be one of the biggest logistical nightmares for vacation rentals—especially if you’re managing your business remotely.

Using digital tools to connect with smart locks, and combining this with seamless SMS or email guest communication to enable contactless check-in , simplifies the process overnight. Guests are sent the keypad access code via automated text message or email, and the code changes upon check-out for extra security. Cleaners and staff can also have their own codes.

This means there’s no need to have someone waiting around in person to hand over physical keys (or pick them up after check-out), and there is no stress in the event of travel delays, late or early arrivals, accidents, or lack of staff availability. There’s no risk of lost or stolen keys, or guests getting locked out.

Digital tools used before and up to check-in can also help you to screen backgrounds and history, to detect issues such as fraud or the risk of bad behavior before guests even arrive.

Contactless self-check-in minimizes the risk of problems during stays, requiring even less involvement from you.

Team operations

Staff scheduling can feel a little like herding cats, and is another logistical challenge when it comes to managing rentals remotely or passively. Digital automation tools can help make this easier too, however.

RueBaRue enables you to see your calendar at a glance, and also lets you pre-schedule texts to cleaners and other maintenance staff, so everyone is notified promptly whenever a guest checks out or a new job is created.

Task automation software can integrate with your PMS so jobs are automatically synched with bookings, and everyone knows where they need to be with minimal manual input from you or a manager. No more risk of guests arriving at a dirty rental (phew)!

Guest surveys and feedback

Digitizing guest surveys can gain you precious insight without extra manual work

Credit: RueBaRue.com

Asking for regular guest feedback is a marker of a great vacation rental business manager. It builds a strong rapport with the guest, offers them a chance to share their opinion, and enables you to continually improve your service.

However, remembering to ask for feedback, writing the perfect survey, and sending it at the exact right time can be challenging, especially if you have a lot of guests.

Digital automation software like RueBaRue can make creating effective guest surveys easier, and lets you schedule them at optimum moments. This means you (or your team) can get a quick snapshot of what guests love and don’t like before, during, and after their stay, and work to improve their experience in real-time.

Guest reviews

Guest reviews can make or break your rental’s booking rates. One study found that 92% of buyers are more likely to purchase after a trusted review, and also showed that positive reviews can make your site (or real estate property) show up significantly higher in Google search results.

That’s why it’s so important to ask guests to leave a rating and review after their stay, whether on your own website, directly on Google, or on the OTA they booked through.

Sending this request at the exact right time upon check-out (the day of, or in the days immediately after) helps improve response rates and ratings. But when you’ll also have other guests checking in, and cleaning and turnarounds to manage, this kind of important follow-up can easily get forgotten.

Automation software can line up guest review requests as part of your overall guest messaging schedule, and some can even post automatic reviews of your guests for you if you’re using a platform that requires it (such as Airbnb).

RueBaRue makes it simple for guests to leave your rentals great reviews on Google, which can have an even greater impact on future bookings and business success: A recent study found that 97% of online buyers check online reviews on sites such as Google or TripAdvisor before making a decision.

PMS and channel management

As a property manager, you’ll likely already know how powerful a PMS can be in managing your bookings, processing payments, and streamlining your rental business to maximize passive operations.

However, we recommend choosing a PMS that can integrate with other specialist platforms, to bridge any gaps or lack of functionality they may include.

For example, many PMSs say that their platforms include features to manage guest communications and or staff coordination, but these can often have limitations as they’re not specially designed for that specific function.

As Cathy Medina found out when she used her PMS to send an important email to guests, but not all of them received it.

“It turned out that sending this information via email and directly from our PMS, resulted in that email being sorted as spam for all the guests who didn’t have a Gmail account,” she says. “That’s when I realized that I couldn’t count on the message sent through my PMS to reach its intended audience. Probably 30% or even more of our guests don’t use Gmail.

“We then had to make phone calls to every guest who wasn’t a Gmail customer. This took us at least two days—not because sharing intended information took long, but because guests had follow-up questions about the accommodation, beach, activities, etc. It was extremely inefficient.”

Some of the most popular PMSs among vacation rental hosts include Hostfully, Hostaway, and Guesty (all of which integrate with RueBaRue ).

Connecting the two maximizes the efficiency of your passive operation, as you can let other specialist tools take over where the PMS leaves off (so you can, for example, use RueBaRue for texting rather than relying on your PMS for emails).

Dynamic pricing

Using a dynamic pricing tool can reduce workload considerably, as there’s no longer any need to constantly monitor the market, or keep a manual eye on the competition.

Automated pricing tools such as Wheelhouse or Price Labs use hundreds or even thousands of data points to adjust your nightly rates, increase your competitiveness, and maximize your revenue—without you having to do anything yourself.

Many tools have a high level of customization and enable you to set limits, so you can ensure your revenue is always healthy even as you consistently appeal to your ideal guests. Most tools will also push updates across all your listings and channels automatically, reducing your workload further and ensuring that your rates are the same no matter where or how guests book.

Building the team you’ll need to be a passive earner

You’ll need a trustworthy and agile team if you’re to handover day-to-day management responsibilities

Credit: Alena Shekhovtcova / Pexels

Automation technology is central to going passive (while saving money compared to hiring a full-on management company). But if you’re looking to go 100% passive, you’ll need some trusted staff to handle operations on the ground.

As a host, property manager, investor, or homeowner, you’ll want to build a small-but-solid team that you can rely on to run your rentals in your absence, while still offering excellent guest service, maximizing your income stream, and boosting ROI.

Building a team can be a challenge in itself, but hiring the right people will save you hours of time and stress in the future.

When hiring people, you will likely want to ask yourself the following questions:

• How will you build loyalty among a team you’ll need to rely on in your absence? What qualities or experience will your team members need?
• How do you define roles and identify the strongest candidates?
• How do you designate and hand over responsibilities?
• How can you make sure your team feels supported while you seek to be increasingly passive?
• How do you track performance and/or identify problems even when you’re absent?
• How will your team members report to you?

The key to going passive profitably (and with minimal effort) is to combine dedicated digital automation software with a lean, dream team in the following areas:

Cleaning and maintenance

Ensuring prompt and efficient cleaning and preparation are crucial whether you have two investment properties or 200, as a dirty or untidy rental will be the first thing that guests notice, and is a one-way ticket to a bad review.

The best turnaround team will not only clean, and change linen, but will also tidy the rental, make it look welcoming for guests, stock supplies such as coffee or soap, check if everything is still working as it should (such as light bulbs, hot tub, or kitchen appliances), and do everything they can to prepare perfectly.

You’ll need someone to take charge of letting cleaners know when, where and how they can go into a rental and get started. You’ll need to make sure your cleaners get paid, know what to do, have a checklist to follow to ensure a consistent service, and have all the materials and products they need.

The best cleaning managers will also schedule periodic deep cleans of the entire property and will keep track of any major repairs, upgrades, or regular maintenance work that are needed.

Using tools like RueBaRue will make any manager’s job easier by enabling pre-scheduled SMS alerts for cleaners or maintenance staff, and can sync tasks with guest messages and confirmed bookings.

Scheduling and operations team

Your scheduling and management team will be the backbone behind your rental operations

Credit: Energepic.com / Pexels

Seamless check-ins and check-outs will require a stellar scheduling and operations manager behind the scenes, ensuring that guests and teams are synched and everything is working as it should.

The operations team will act as your “executive assistant”, and take care of the inevitable admin and logistical challenges that will arise at all stages of the rental business process.

This might include keeping track of payments and paperwork, coordinating invoices for work, managing emails and inboxes, and making sure all your software is working correctly. Depending on the scope of your cleaners’ work, your scheduling team may also manage laundry, linen, and repairs (including hiring and paying electricians, plumbers, or builders at short notice).

They could also manage your budget, accounts, income and IRS account, taxes, historical data, pricing, revenue, cash flow, and anything else you can imagine, depending on your requirements and their skillset.

You could also hand these important financial tasks to a revenue manager, or even a separate accountant.

Guest communication

It’s crucial to have someone in charge of guest communication when it comes to rentals, as it’s such a central part of giving guests an exceptional experience. Guests need to have a point of contact, even if only in an emergency.

They also need someone to let them know how and when to access their booked rentals, when and how to check out, and everything in between. Even if you’ve left excellent digital guestbooks and local guides, it still makes sense to have a named person on hand to give guests extra peace of mind.

Your guest communication manager will also be in charge of scheduling messages via your digital automation tool, and will also be the person who will check in on guests pre-, mid-, and post-stay.

They could also be the person who coordinates and leaves ratings and reviews, who gets back to guests when they inquire via email or OTAs, takes the lead over the guest communication inbox, and is the dedicated contact when something goes wrong, or guests have an unexpected question.

If they use automation tools to their best effect, such as RueBaRue’s pre-scheduled SMS system, they’ll likely be able to manage all communication remotely. However, it also makes sense to build a team that can access the property quickly in case of an emergency.

Streamline communication and make contacting guests easy even when remote. Wow guests with instant text replies and timely updates with RueBaRue. Book a demo today.

Digital tools: The path to generating passive income

Harnessing the power of tools like RueBaRue makes going passive much easier

Credit: RueBaRue.com

Whether you want to go fully passive, or still retain some control and involvement, digital automation can make the process much easier.

Combining digital tools specially designed for vacation home rentals, along with a team you trust, can save you up to 25-30% in property management commission while still driving consistent bookings, great ratings and reviews, and excellent ROI.

Leveraging helpful digital tools such as automated and instant SMS messages can improve guest communication, while contactless self-check-in, check-out, and digital guestbooks offer the guest greater independence so they have a great stay without needing you or your team in person.

Digital tools are also crucial behind-the-scenes of your rentals and can help coordinate everything from reviews to cleaning to maintenance, revenue management, data insights, and pricing.

Harnessing the power of automation means you can keep your team lean and agile, manage remotely, and take a hands-off approach if you choose, while still protecting your profit.

“Having RueBaRue has tremendously cut the number of questions that guests have about the home and amenities, local attractions, and places to eat.” – Miss Kitty’s Fishing Getaways

Cut your workload and increase guest independence while still giving guests a great stay, and maximizing your revenue. Schedule a RueBaRue demo now.