n the rental home market, vacation rentals are quickly becoming a powerful alternative to long-term tenant rentals for investment residential property. Some properties that are ill-suited to becoming a family home make fantastic vacation rentals, and many homes could serve well in either market depending on the neighborhood and what you want to do with the property. Just as landlords offer an important supply of homes for rent, vacation rental hosts provide much more welcoming travel lodgings than your average hotel room.
Most people see vacation rental as a glamorous and perhaps a little bit frivolous way to put investment property to use. But over the last decade as vacation rentals have risen in popularity, hosts have discovered that the risks of hosting guests, any guest sight-unseen, are almost exactly the same as the risks of bringing in tenants without vetting and background checking. Amidst the glamour and the profits are all the same problems; there are scammers and wrecked homes, thieves and criminal activity.
It's no surprise that vacation rental hosts have started turning to the service infrastructure built for landlords of long-term rentals.
The Rise of the Vacation Rental Industry
The vacation rental industry is relatively new. While there have always been a few vacation homes and cabins that are rented seasonally, Airbnb pretty much invented the now wide-spread trend of any homeowner being able to rent out a room in their home or purpose investment residences toward vacation-oriented short-term rentals. Airbnb was founded in 2008 and since then, the platform and its quick-to-rival contemporaries like VRBO and HomeAway have popped up to create an impressive marketplace of supply and demand between home hosts and travelers.
It rose from weekend stays to hosts that were verging on long-term rentals, with guests that stayed months and multi-month stays as an alternative to long stays in hotels for travelers, students, and long business trip professionals. Of course, this is a long time to trust someone to stay in your home or reside in a furnished investment property.
Unfortunately, the market has grown much faster than the infrastructure to support it. These website-apps market themselves merely as booking platforms. They connect hosts to travelers, but they offer minimal support services for either making these connections safer or solving problems when they occur. This, unsurprisingly, has created some serious problems. There have been scammers and harm done on both sides of the equation. Why? Because hosts and travelers don't have the same protective infrastructure as landlords and tenants. Infrastructure that is badly needed.
Vacation Rental Hosts Have the Same Concerns as Modern Landlords
Want a few examples? Check out the website AirbnbHell.com and skim the endless pages of both guests and hosts reporting experiences. Many suffered misunderstandings, many were scammed with false listings or lying guests. There are dozens of hosts who experienced property damage from guests who are completely un-screened and guests who were frightened or whose privacy was invaded because hosts are not vetted.
The booking platforms are not helping. In fact, the booking platforms' only motivation is to create more bookings and they have been known to practically force both hosts and guests who were not a good match to go through with a stay to collect the fees. As the industry ages, both hosts and guests are learning that the current industry standards are untenable. The booking platforms are nobody's friend, but hosts and guests still want to connect, with far better vetting and ability to be selective on both ends.
In other words, the vacation rental hosts need the same services that have been built for landlords. Hosts need the ability to run background checks on guests, which is more than worth it for week-plus stays in high-earning homes. Hosts need the ability to check credit, criminal records, and overall confirm that guests are who they say they are.
Guests also need the ability to check in on hosts. Often, just to ensure that they really are the owners and their home hasn't been listed as a booking scam. A problem which is surprisingly common.
Vacation Rental Hosts Going Private and Seeking Services
Between the mounting pile of troubling stories and Airbnb's increasingly poor reputation for resolving problems for either guests or hosts, the industry is changing again. Where once hosts piled onto Airbnb to discover the joy of vacation rentals, they have now invested in vacation rental properties but are leaving the dysfunctional platforms.
Vacation rental hosts and property owners are going private. And freed from the restrictions of Airbnb and other platforms that once limited their communication and resolution options with guests, now hosts are free to use the services they really need to optimize both the satisfaction and safety of everyone involved.
Hosts were already contracting their own cleaning and property management services. But now, credit checks, background checks, and payment agreements can be tackled with truly functional services. Interestingly, the same services designed for landlords who need the same assurances.
The Landlord-Tenant Services Needed by Vacation Rentals
Identity and Ownership Verification
What has been discovered in the vacation rental scene is that the single most important first-step for hosts and guests is verifying that each is legitimate. Travelers need to know that their hosts are real people and that they really own (or can legitimately subletting) so that they know there is a safe space when they make travel plans.
Hosts, naturally, need to be able to verify that guests are who they say they are. They need to confirm that the person who has started the booking is not using an alias, is able to pay, and can be held accountable for any damage they cause. Which takes us to credit and background checks.
Credit and Background Checks
When a guest books with a host, the host is entrusting that guest with access to their personal home or an investment rental property. In both situations, it really truly matters to know who the guests are and that they are safe people to deal with. They need to know that guests will not be personal threats and are very unlikely to cause damage to the properties.
This is the exact same need that landlords have to verify tenants, and that tenants will likely treat properties with respect. A credit check will let you know whether tenants have been responsible in the past, and if they have the wherewithal to pay their proposed booking fees (no bounced charges). Background checks will tell you if a guest has a criminal past that indicates they will be unsafe to host.
Rental Contracts (AKA - Leases)
The biggest failing of today's booking platforms is writing and upholding contract terms. Many experienced hosts already know the terms they would put in a custom vacation rental lease, if they could. But their terms are not upheld by platforms. Going solo, hosts will need to write legitimate short-term rental contracts including payment and refund terms, cleaning fees, and binding house rules.
Violations of these terms, when put into a real contract that guests sign, can result in enforceable cancellations and damage fees. Modern landlord lease-crafting services can help hosts not only build a lease that protects them, but also a lease that will protect guest-rights and make guests feel more comfortable and safe in a vacation home.
Other than connecting travelers and hosts, the best thing platforms did for vacation rental was to handle payments. Until it became clear that they could or would not effectively handle things like cancellations and refunds in a consistent way. This leaves hosts needing a new quick online way for guests to pay online in the course of booking or in response to additional days or fees. Online landlord services actually include payment portal options that hosts should seriously consider putting into use.
Independent Marketplace Connections
The last thing that the evolving vacation rental industry needs is a new widespread way for travelers to connect with hosts, and hosts to market to travelers. Currently, the vacation rental homes available are scattered over half a dozen different platforms, all of which prohibit hosts and guests from communicating outside the platform.
Today, hosts that are going solo need a new independent platform, or perhaps simply to connect with travelers through similar channels that landlords connect with potential tenants.
The vacation rental industry is changing. It's morphing and developing into something new in serious need of support services and infrastructure. The good news is that there are services and infrastructure already in place that are near-perfectly configured for vacation rental: Those designed for long-term rental landlords and tenants. Essentially, this is the same market with different time-period parameters and a penchant for furnished homes.
Try VerticalRent for Your Vacation Rental Mangement Needs
Are you a vacation rental host looking for services that do better than the platforms you're leaving? VerticalRent has built our services for the landlord-tenant market with all the components you need to improve the quality and reliability of your vacation rental, short-term rental, and vacation home rental business as well. We understand that vacation rental is a business, not just a hobby, and we'll help you with the background checks, contracts, and payment portal you need to make your vacation properties work like the business it is. Contact us today to learn more.