Optimizing STR Management: A Comprehensive Guide for Small to Mid-Level Investors in Property Investment and Management Strategies
Tips For Successful Property Management
Step 1: Choosing the right property or ‘creating’ it
Create an Experience through the aspect of DESIGN and Personality; give the place a character of its own
EXPERIENCE!
Vacation-rental business is hospitality, a service industry business, and should be treated as such.
There are hundreds of short-term vacation homes on the market everywhere and the numbers are growing every day. Your property has to stand out somehow. You can either spend a lot of money on buying a ‘unique’ property or create your own ways to differentiate. Simple themes and designs go a long way, and people book vacation homes for the experience.
Having a good team will make all the difference in a guest’s experience which in our day of technology leads to good reviews, higher rankings and organically moving up on the algorithm ladder.
‘Instagrammable’ – ALGORITHMS & Staying relevant
The worst business strategy I have seen on the market is when people invest in an excellent property –beach access, views- and then cost-cut on the interior design.
It sure is cool to have a pool with a firepit inside, or a shower overlooking the ocean, or a renovated castle but there are cheaper ways to differentiate yourself from the competitor, like an indoor swing, retro fridge, study nook, etc…
I love this picture below, the indoor swing is an excellent addition to this corner of the room, I can imagine people enjoying their vacation reading a book on that swing and sharing that experience with their loved ones and potentially followers. Even better if the swing faces the window if there is a view to be captured.
Make smart purchases when furnishing, you will need to buy the basics like a bed, a sofa, a coffee table and appliances. Use the colors, textures prints and patterns of your purchases to your advantage.
In design; the number one theme setter I think should be the location of your property. What does the town feel like? A tourist visiting your area is an indication that they are highly likely to be looking for what your town offers- Match the energy of your area with your interior.
In my experience, the type of visitors in North Cyprus are looking for unique, local experiences from rentals and they care about the proximity to the beach.
Below is a good example of ‘how a good design in Cyprus can look like’. The mosaic tiles adds color, the heavy use of blue and white with some wooden accents in practical furnishing brings the Mediterranean into the home. An excellent way to use design to your advantage without the need for extra purchases. I would just not recommend living plants in short-term rentals as they will need too much care, and some guests will end up using them as ash-trays, sadly.
However, the design below is an example of a non-value add attempt on attracting guests. The cost of purchasing and installing the full-length statues will not reflect to higher occupancy rates and/or higher prices. I don’t see a big group of tourists willing to rent your place over another nice accommodation paying extra for the replica statues where they are in the country that has the real Greek and Roman statues they can visit during their trip.
To enhance the local experience, I always leave a pack of Turkish coffee, recommendations for activities in the area that only locals know like mushroom hunting in certain seasons, local cuisine cookbooks, travel books, history books, beach equipment, and consider partnering with local businesses to offer exclusive discounts to guests.
Step 2: Transparent Listing and Communication
Satisfied Guests-Good Reviews-Higher Rankings-Higher Occupancy
People are booking literal yurts, tents, caravans, treehouses, caves and barns (really). So manage expectations, there is a buyer for everything.
Optimize Your Online Listings: Ensure that your online listings are up-to-date, and accurate
Use high-quality photos that showcase the location and the property’s amenities. Provide detailed descriptions and highlight the property’s unique features and benefits.
Set realistic expectations and Communicate: Be very clear with pros and cons of your property. Disclose any potential for noise, parking-problems, let your guests know if your house is child, disabled or pet friendly.
Have a house manual for your guests.
Have nearby recommendations for food, groceries, entertainment, beaches, public transport
Have the important numbers easily accessible….
Set Clear Policies and Procedures: for check-in, check-out, cleaning, damage deposits, and cancellations. Communicate these policies to guests before they book, so they know what to expect and can plan accordingly.
Step 3: Keeping up the quality of service
Invest time in building a good team of cleaner, a handyman, an electrician… Maintain Property Condition: regular maintenance, repairs and cleaning are essential. Remember each guest will have a ‘first-impression’ of your property and it will reflect on the reviews. Having the best launch, to be followed with bad upkeep practices will not yield results, as hosting is a service industry and is not a passive income-generating investment. A team of professionals are needed for providing this service, so ensure you have them when evaluating investment options.
Stock on essentials: toilet paper, soap, shampoo, drinking water etc
Ensure smooth check-in: Invest in a smart-lock and provide wifi details as part of check-in procedure
Maintain Excellent Communication: Respond promptly to tenant concerns and provide regular updates on maintenance and repairs.
Stay Up to Date with Regulations: Keep up to date with vacation platforms, local, state, and federal regulations that govern property management.
Step 4: Diversify your target audience
Attract different tourist groups/ demographics: age, nationality, and purpose of travel
Accessibility features: add features for people with disabilities
Child friendly (18+ hotels missing out, make simple additions like a high-chair or a crib)
Pet friendly (most of the hotels are missing out on this segment)
Offer Personalized Service: to guests by responding promptly to inquiries and requests.
Provide a welcome basket or gift to make guests feel welcome.
Invest in a collection of useful local books, and maps
Step 5: Weed out the ‘headache’ tenant
Set a fair Price: do not give discounts to everyone who asks
Collect payment at the time of booking/reservation
Screen Tenants Carefully: Popular platforms like Airbnb has features that can help screen tenants
Deposit: Collect a fair deposit
Do not go over your capacity: do not sacrifice comfort of your guests for a few extra bucks, it leads to a bigger run-down on the property and decreases overall guest satisfaction.
Capacity – Legal sleeping spaces (ventilation)/ match sleeping space and dining, lounging space, dining sets, bathroom adequacy, etc. You can not add a pull-out sofa in your living room if you will not provide extra plates, mugs, chair for that extra person you will be charging. In some countries you can not sleep people in a room without windows, or adequate ventilation, pay attention to the comfort and safety of your guests first.
You can not turn a garage into a sleeping space by adding a hammock…
Step 6: Make room for ‘the cost of running a business’
Expect to run into occasional issues, and for things to break down – have a team that will act fast to resolve the issue and offer something complimentary as an apology to the guest.
Get durable, mid-priced and easily replaceable furniture that your deposit can cover – do not have your grandma’s valuable Persian rug in a busy short-term rental.
In my case, I have fallen victim to this and learned. I had a beautiful hand-carved wooden centerpiece in my rental and to my utter surprise one of my guests used it as a firewood.
Minor damages are part of doing this business, stains, broken mugs, chipped plates are not worth going after the deposit, make sure your guests have positive memories of their time in your place.
Keep an eye on the expenses but do not risk a bad review. It is okay not to make a profit on every reservation, some of them are there to build a steady flow of cash and reviews, leading to algorithm traffic to make way for longer and higher return bookings on short-term prices.
Step 7: Prioritize reviews
Satisfied Guests-Good Reviews-Higher Rankings-Higher Occupancy
Your reviews can be your only marketing spending.
A collection of good reviews and a high star score will get you on top of the algorithm. You will get more bookings without having to spend on advertising
A collection of good reviews will make you a superhost / premier host
Usually, popular platforms charge a commission range of 2-5% per booking from host-payout which is very low.
What else can you do?
•Solicit Reviews and Feedback: Encourage guests to leave reviews and feedback on your online listings and social media profiles. Respond promptly to any complaints or concerns and use feedback to improve your property and enhance the guest experience.
•Establish a Referral Program: Establish a referral program that rewards guests who refer their friends and family to your beachfront vacation rental. Offer discounts, gift cards, or other incentives to encourage repeat bookings and referrals.
•Offer Competitive Rates and Promotions/ Seasonal Pricing (6 months high-season in Cyprus): Research the market rates for similar beachfront vacation rentals and offer competitive rates. Offer promotions such as discounts for extended stays, early bookings, or last-minute bookings to attract more guests.
•Partner with Online Travel Agencies (OTAs) or local businesses: Partner with OTAs such as Airbnb, Vrbo, or Booking.com to increase your property’s visibility and reach a wider audience. Use their marketing tools to optimize your listings and increase your occupancy.
•Leverage Social Media: Use social media platforms such as Facebook and Instagram to showcase your property and promote your vacation rental. Share photos, videos, and testimonials from satisfied guests to build trust and credibility.
How I started with property management and hosting?
After graduating from university in the UK, I came back to Cyprus and started managing my family’s properties on long-term rentals. This was not a demanding task, fairly low involvement was required but it gave me a foot into the real estate business.
Later I started experimenting with short-term rentals with an Inn that was an old Ottoman Pasha House in the old town of Nicosia. Being a historic home in a historic town, all that was needed was highlighting the inherited value and beauty of the place in marketing. I learned the importance of unique literature and pictures in optimizing listings at this stage. No matter how attractive a place is, the tourists will not know unless it was communicated to them digitally.
And, later added a Luxury-private villa in Kyrenia to the vacation rentals I manage. Then the demand grew and I kept on expanding the portfolio I managed to 10+ doors within the same year taking advantage of being bilingual and digitally literate.
How I started investing in real estate?
Then I took on the project to fix and flip an old British-era home in the coastal town of Tatlisu, and started renting it on short-term rental platforms.
This turned out to be a side business, which hosted thousands of people, hundreds of stays, and 15 consecutive ‘superhost’ badges, many challenges and lessons learned over the years.
Nevertheless, the investment turned over in a few years and I invested in the adjacent lots of land, aiming to grow the capacity anywhere between 25-35 doors.
The occupancy is now somewhere near 90% and there is no room for growth in the occupancy anymore without growing the capacity considering the downtime accounted for upkeep.
Hosting has been a learning curve for me, and it still is. I wish anyone considering hosting or investing in a vacation rental the best of luck!
Sincerely,
Director of Mediterranean Condos | Investment, and Residency Expert Broker in Cyprus Real Estate
Voted Forbes Best Buy | Formerly associated with Live and Invest Overseas, Forbes Global Properties, & Expat Exchange
Email: 📧 cyprus@mediterranean.condos
Phone: ☎️ +90 533 864 1652
