Summary: What is short-term rental software and why is it important for your short-term rental business? If you’re serious about making life-changing cashflow from your short-term rental, you need to consider investing in short-term rental software. For some, it can mean the difference between making and losing money. For others, it can result in a big step-up in profitability. So just how does short-term rental software help you maximize your profit? Read on to find out!
[Disclaimer: We are not accountants, lawyers or financial advisors, so please consult your own team of professionals about the topics covered in this article.]
short-term rental software is an essential tool for those who are serious about making money with short-term rentals.
So the question is, how does short-term rental software help you maximize money from your short-term rental?
That’s the subject of this article. But before we dive in, let’s cover the basics of short-term rental software in case you don’t know what it is.
What is Short-Term Rental Software?
Probably the reason why this topic is so confusing for new investors is that short-term rental software does so many different things.
This makes it hard for anyone to say, “this is what it is and this is what it does.”
At the core of short-term rental software is channel management. Channel management is what allows you to manage your listing on multiple websites. These websites are also known as online travel agencies or OTAs. Airbnb and VRBO are two of the most popular OTAs for booking short-term rentals.
One of the benefits of short-term rental software is that they consolidate all of the bookings from different OTAs into one platform. This prevents costly mistakes like double bookings, which we have experienced. More on that later.
The other core function of short-term rental software is consolidating all of your guest communications into a single inbox.
Imagine having to log into multiple sites to check your inbox. If you’re not systematic about checking, you’re bound to miss messages. This could hurt your bookings because you don’t respond to a simple question from a potential guest about your property. As well as negatively impact reviews because you’re slow to respond.
From there, short-term rental software companies added numerous other features. One example is the ability to create a direct booking website, which we’ll discuss more below. Most integrate seamlessly with other software products like dynamic pricing.
Bottom line is, short-term rental software is supposed to make managing your property easier.
Now, let’s dive into the ways short-term rental software can help you maximize your profit.
Lower Property Management Costs by Self Managing
This one might seem obvious but it’s worth taking a few moments to go into detail about this.
Property management for short-term rentals can run you as much as 30 to 40% of your rental revenue. For example, if your property manager charges you 30% and your short-term rental generates $100,000 in rental revenue per year, you pay your property manager $30,000. Imagine if you could keep that amount for yourself. It would represent a huge chunk of savings for you and would significantly maximize your profitability.
Maximize Tax Savings by Self Managing
If you don’t know by now, you can shelter your W2 or 1099 income with short-term rentals.Which would significantly reduce your taxes. You can read more about this by clicking HERE.
We like to look at taxes as a guaranteed form of return. Whether or not you maximize a profit on your short-term rental, you’re going to earn the tax savings. If you want to read more about tax savings being a guaranteed form of return, click HERE.
One of the ways that many in our community qualify for the tax savings from short-term rentals is to self manage. There are ways to qualify with a property manager, however, this usually requires owning several short-term rentals. Therefore, if you only own one or two properties, you’re probably going to have to self-manage in order to maximize tax benefits.
Increase Bookings by Increasing Your Reach
One of the best ways to maximize bookings is to list your property on many different websites.
You might assume that Airbnb is the most visited website for travel accommodations. However, according to multiple surveys, TripAdvisor and Booking.com are consistently ranked at the top.
It’s also important to recognize that your guests come from all over the world.
One of the benefits of short-term rental software is that they consolidate all of the bookings from different OTAs into one platform. This prevents costly mistakes like double bookings. We had a double booking situation where we had booked a place months in advance. A day before check-in we communicated with the owner. Which is when we found out about the double booking! We had to scramble to find a new place to stay. The owner got hit pretty hard too. He had to cancel our booking. Which had a number of negative ramifications including: putting his Superhost status in jeopardy, host cancellation fees and a negative review.
Decrease Fees With Direct Booking
One of the main reasons why owners invest in short-term rental software is to be able to get more direct bookings.
A direct booking is when a guest books a stay with you directly on your website. As opposed to through an OTA like Airbnb.
The benefit of direct booking is that you can avoid the booking fees. Booking fees vary depending on the OTA but generally they take a percentage of the total amount of the reservation. For example Airbnb collects 3% of the booking.
So you can see why so many owners are investing in short-term rental software!
Repeat Bookings With Email Marketing
Email marketing is one way to generate more direct bookings.
The idea is that you collect your guest’s email. So you can email them in the future with an offer to book a stay. Ideally you get additional information about your guest. For example, let’s say that they stay at your property to celebrate their anniversary. You get this information along with their email. You then send them an email about a month before their anniversary. Present them with an offer to celebrate their anniversary at your property again.
I did want to point out that this one is more about generating direct bookings. However, I included this one because short-term rental software can make collecting guest emails easier. For example, one strategy for collecting emails is to use something called StayFi. With StayFi, you give your guest access to your WiFi. In exchange, your guest has to give you their email address. StayFi can be integrated with short-term rental software making this process seamless.
Additional Income Sources
This is one of my favorite topics and the possibilities are endless. The idea behind this one is to find other ways to make money from your guest. You have a captive audience. They are staying in your property on average 3-4 days. So there must be something else you can offer them!
Some examples are airport transfer to and from the airport. What about selling them tickets to a local attraction? What about massage services?
There’s no end to the possibilities.
However the key to all of this is to have a way to collect money. The last thing you want to do is to collect money in cash or through something like Venmo. This is where short-term rental software can really shine. For example, you can use something like YourWelcome tablet and integrate it with short-term rental software.
Running Your Short-Term Rental Like a Business
If you’re going to be more than a casual short-term rental owner and you want to run a profitable business, then investing in short-term rental software should be a no brainer.
The question becomes, what short-term rental software should you use? Check back later on our blog for a future article on this topic!
Want to learn how to incorporate short-term rental software into your short-term rental business? Learn all of the ins and outs and surround yourself with a community of other short-term owners by taking our short-term rental course Accelerating Wealth or Zero to Freedom
