Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.
You can get a false sense of security when things are going well.
Sally and I have owned The Overlook for a little over a year now. Revenue is up, guests are happy, and we feel like we've gotten a handle on operations.
Right when you think you know it all, something happens to remind you that you don't. For us, it was a group of guests in December who did some minor damage and stole a few items including a bluetooth speaker from the game room.
The damage has been fixed and the game room has a new speaker, but I still used the opportunity to seek some advice.
I called Dr. Fred van Bennekom, a customer service expert whose company, Great Brook Consulting, helps companies listen to their customers.
Van Bennekom recently sold a vacation rental property in Harpswell, Maine that he had owned for more than ten years. (You can see photos and a short video tour here.) He had plenty of lessons to share.
Interview with Dr. Fred van Bennekom
Q: How have customer expectations changed since you first bought your property?
"Customer expectations have changed dramatically in the past ten years. Ten years ago, house rentals were a cottage industry. People did it, but it wasn't widely known.
"If there were some rough edges in the property or the furnishings, people were okay with it. I think it reinforced the idea they were getting a bargain.
"Today, HomeAway has TV ads of a family renting this gorgeous house on the ocean with an in-ground pool so they can bring their dog on vacation. How many of the homes in HomeAway's inventory actually look like the house in the ad? Probably very few, but that ad creates a certain expectation.
"People today are less tolerant of rough edges. Even kitschy furniture that used to be a plus can now be viewed as a negative. People expect to rent a 3-bedroom house on the ocean at about the same price as a hotel room—but have the amenities and services of a hotel."
Q: Have you seen a shift in guest demographics?
"In later years, I started to have more guests who didn't really understand how renting a house is different than renting a hotel room.
"For example, we provide a set of linens and towels for each guest plus a few extra towels. In a hotel, the housekeeper will come each day and change your towels or you can call the front desk and ask for more.
"It's different in a rental house. You need to wash your own towels if they get dirty and we do have a washer and dryer.
"I got a call one Tuesday night after 10pm. My guests had checked in over the weekend and now wanted to wash the towels but they were complaining that the washing machine was not working.
"The washing machine worked just fine, but they didn't know how to turn on the water shut off valve. I think they rented an apartment and weren't familiar with how things work in a house.
"I put instructions for things like this in the house guide and even email a copy to guests at booking, but they don't always read it. By the way, two days later this guest called because the dishwasher wasn’t working. The kitchen is directly over the washer, and he had apparently turned off the hot water valve to the kitchen sink when trying to get the washer working and didn’t turn it back on."
Q: Did you do anything different over the years as guest expectations changed?
"When I first bought the house, it was not customary to provide guests with consumables such as paper towels, toilet paper, and dish soap.
"The next year, I went on a trip to Ireland with my family where we rented a house. The very first thing we had to do was go out and buy consumables; there were none in the house. I realized this was a hassle for guests so I decided to provide all the basic consumables at my rental property. You can buy these pretty cheaply in bulk at Costco.
"That year, the Costco-size supply of toilet paper was left in plain view and someone took it all! People would also throw smaller bottles of laundry detergent into their car. After that, I started providing “starter supplies” of consumables. I put two rolls of toilet paper in each bathroom, and I bought a really big laundry bottle and kept refilling it."
Q: Speaking of taking things, what was your experience with theft and damage?
"The first year we had the place we outfitted it with cute little knickknacks, but we quickly realized things get lost, damaged, or stolen—not sure which. My wife and I played a game called, “What ever happened to the…?” You shouldn't put anything in your vacation rental that you really don't want to lose.
"The one I really remember was my Maine Gazetter—a large, detailed atlas of the state. I’d owned it for decades and had my own notations on the map, so I was really disappointed to lose it."
"One summer, someone once forgot to lower the umbrella on the deck table. There was a major windstorm and the whole table blew off the deck! I put a picture of that on the front cover of the house guide as if to say, 'this is why you need to know this information.'
"An off-season renter got into some sort of fight with her boyfriend and he broke four of the rugged dining chairs and damaged several walls. She tried to glue the legs back on one of the chairs but it completely fell apart.
"I also found coins and sand in the dryer, as if someone had gotten their pants wet and then just tossed them in the dryer without cleaning them off or emptying the pockets. The dryer’s bushings died a few months later, no doubt from the sand.
"Those experiences reinforced the practice of communicating with guests and having your property manager inspect the place so you can charge the guest out of their security deposit when there is damage or theft."
Q: What was the toughest part about owning a vacation rental property?
"The stress of having to deal with crisis situations when you don't have resolutions and knowing at any time the phone might ring with some new crisis.
"I once got a call on Monday that there was no water at the house. I live 2.5 hours away, so I had to work with my property manager to diagnose the problem. We had guests arriving that Thursday for their kid’s college graduation, so I had to reach out and tell them I wasn't sure whether there would be running water when they arrived.
"It turned out that the well pump had died. Fortunately, I was able to get it fixed in 24 hours, but the work pales in comparison to the stress."
Q: What did you like best about owning a vacation rental property?
"I actually enjoyed interacting with renters during the sales process. It was nice having conversations with people about the local area and helping them make plans.
"Maybe only one out of ten guests was a major headache. The rest were really enjoyable. But, boy, those ‘ones’ wear on you after a few years. That’s why we sold."