Ultimate Guide to Investors Property Management
Choose Scottdale makes a compelling case for investing in Scottsdale. Each year, we get more than 11 million visitors who generate an average of $3.3 billion. Why wouldn't you want to get in on that action?
To profit off of Scottdale's thriving tourism industry, you don't need to launch a business. Buying real estate and running a short-term rental is a great way to create an easily scalable (and profitable) investment portfolio.
However, it's not as simple as signing on the dotted line. We often recommend partnering with investors' property management to get the experience and support you need. Read on to learn more about managing rental properties and how our professional team can help.
Short-Term or Long-Term Rentals?
First, let's talk about an important choice you'll need to make when investing in Scottsdale properties. Should you go with a traditional long-term rental model or cash in on that bustling tourism industry with short-term contracts? Here are the pros and cons of both models and why we ultimately prefer short-term rentals for their ROI potential.
Consistency
With a short-term rental, you can expect to rent out your property for as little as one night and up to a few weeks. Long-term rentals involve leases that span a minimum of one month but more commonly one full year.
It's no surprise, then, that consistency is one thing that long-term rentals have over short-term rentals. In theory, you'll have the stability of leasing to the same tenants for quite a while, with the possibility of lease renewal.
That said, long-term rental owners can face inconsistency in a much more expensive way than short-term rentals. For example, evicting a tenant for failure to pay rent or lease violations can cost quite a bit.
Profitability
There's no easy way to determine which model will be more profitable for you in reality. After all, with an interrupted year-long lease, you're looking at guaranteed income every single month. If you're not booking your short-term rental often, you may not turn much of a profit.
That said, short-term rentals can offer far more property ROI optimization. According to Leaders, full-time short-term rentals yielded an average revenue of over $55,000.
For starters, you can typically charge a lot more per night for a vacation rental than a residential rental. Plus, you have a lot more leeway when it comes to dynamic pricing when you aren't locked into a long-term lease.
Overall Maintenance
When it comes to maintenance, you're looking at a trade-off of pros and cons depending on the rental model you choose.
For example, short-term rental guests may not have the same high standards as long-term renters. While you don't want to force your guests to deal with noticeable maintenance problems, you may not get as many maintenance requests from them.
At the same time, short-term rentals may undergo more wear and tear because of the high turnover rate. Plus, you'll need to invest in things like professional cleaning in between each guest's stay.
The Basics of Short-Term Rental Property Management
We talk every day to Scottsdale investors who don't have the time or resources to manage their short-term rentals on their own. In fact, some of them start out thinking it will be a lot easier than it is. Here's a glance at the role investors' property management plays in short-term rental profitability (and why you'll need that support if you want to earn passive income).
Legal Compliance
Can you buy any property in Scottsdale and start leasing it out to vacationers? Not exactly. Our local government does impose some rules and regulations on short-term rental ownership.
For example, you'll need to maintain a short-term rental license by paying an annual $250 fee. Failing to obtain and keep a license active can result in fines and other legal problems.
If your guests make excessive noise or participate in illegal activities on your property, neighbors and local police can intervene. Property managers focus on staying on good terms with neighbors and leasing to trustworthy guests to avoid legal problems.
Marketing and Listing Management
What can be done about the lack of consistency for short-term rental owners? The key is to build a great marketing strategy that continuously attracts new guests and keeps your property booked year-round.
This requires clean, crisp listing materials such as:
High-quality photography
SEO-rich property descriptions
Listed attractive amenities
Attractive location markers
You're also going to want to market your property across platforms to maximize visibility. Property managers will put together and manage all your short-term listings. We'll even strive to maintain your Airbnb Superhost account status.
Competitive Pricing
We mentioned earlier that one of the biggest pros of owning a short-term rental is the potential to turn a bigger profit than long-term rental owners. To do so, however, you're going to need a dynamic pricing strategy that accounts for supply and demand.
Local Scottsdale vacation rental managers can easily predict supply and demand in our tourism industry. We know when to start:
Offering early-bird specials
When to increase rental prices due to high demand
When to start dropping prices to keep bookings high during the slow season
The goal is to maximize your income every season without outpricing your competition. This requires acute familiarity with the trends in both tourism and accommodation pricing.
Booking and Guest Support
Even with seemingly intuitive platforms like Airbnb, vacation rental booking isn't as simple as sitting back and waiting for guests to secure their dates. Guests often have questions before they even finalize their stay. Answering them quickly can make or break their decision.
Guests will also expect support throughout their entire stay. For example, they may want someone there for check-in, especially if your rental features require an explanation (like how to disarm the security system upon entry or how to turn on the hot tub jets).
Property managers can answer questions and respond to concerns even when investors aren't available.
Maintenance Oversight
Your initial investment isn't the only expense of owning a vacation rental. When you're managing rental properties, you'll need to reinvest a portion of your profits to maintain and improve your property.
Property managers can serve two important functions when it comes to short-term rental maintenance. The first has to do with general maintenance oversight, involving things like:
Discussing maintenance issues with guests
Scheduling preventative and emergency services
Ensuring that maintenance projects are handled properly
The second has to do with minimizing maintenance costs. By inspecting your property often and working with reputable contractors, property managers can help you tackle maintenance concerns before they get out of control.
Cleaning Oversight
Few things require as much oversight as short-term rental cleaning. The good news is that you can build cleaning fees into guest expenses. However, you'll still need to make sure that your rental is pristine before each new guest arrives.
As with maintenance oversight, property managers will hire reputable local cleaners and oversee their services. This includes:
Scheduling professional cleaning services
Providing minor touch-ups on an as-needed basis
Inspecting the property to make sure cleaning meets standards
A clean vacation rental is a satisfactory vacation rental. With better cleaning oversight, you can improve your guest reviews and rental status.
Going the Extra Mile for a Better Guest Experience
Every short-term rental investor needs to have a strategy that accounts for every process we've mentioned above. What if you're looking to take things a step further to create an upscale rental for guests looking for luxury? Here are a few ways you can go above and beyond as a short-term rental owner and see a higher ROI.
24/7 Availability
We talked earlier about the importance of guest support. In fact, this is one of the biggest reasons why investors outsource managing rental properties: they don't want to be available to guests at all hours.
That said, you're creating a much better guest experience when you provide 24/7 guest support availability. This allows guests to:
Report property emergencies
Request lockout help
Get their most pressing questions answered no matter the time of day
Make sure to hire a property manager that offers guests an emergency number to use for after-hour calls.
Luxury Amenities
There are certain amenities that guests expect, like toilet paper, towels, bed linens, and pillows. Then there are the amenities they want but can't find everywhere.
According to Airbnb, these are some of the most searched-for amenities on their platform:
Pool or hot tub
Free parking
In-unit washer and dryer
Central heating and cooling
Fireplace
Kitchen
Remember, your best customers are looking for more than just basic accommodations or a place to sleep. They want luxury amenities, which your property managers can maintain for you.
Adaptability Based on Supply and Demand
One of the most important real estate investment tips we can offer to short-term rental owners is to always use dynamic pricing. A static pricing model may be less work, but it's not going to do you any favors when competitor prices drop and yours remains the same.
Pricing isn't the only thing that requires adaptability. We also recommend that investors use a dynamic approach when setting things like stay minimums.
For example, it makes good financial sense to impose stay minimums of three days or more during peak season. However, allowing single-night guests to book your rental during the off-season can give more guests a chance to experience your great vacation rental.
What Makes Luxury Cashflow Stand Apart
We're not the only investors' property management partners in Scottsdale, but we strive to be the best. Find out what makes Luxury Cashflow stand apart from other short-term rental property management companies in the area.
Buying Assistance
At Luxury Cashflow, we aren't just property managers. We can also act as your experienced realtor, helping you find the perfect properties to add to your short-term rental portfolio. Thanks to our property management experience, we seek out properties that:
Have great locations based on tourism trends
Offer desirable amenities (or could easily be renovated to include great amenities)
Align with your current and long-term rental goals
Because we act as both your realtor and your property manager, we hone in on properties that fit our luxury brand.
Selling Assistance
Luxury Cashflow is here for you from the beginning of your investment journey to the end. In addition to helping buyers, we act as the listing agent for luxury property sellers. If you decide you want to cash in on your property, we can support that goal.
Acting as a listing agent benefits both our buyers and our sellers. Working on both ends means that we have:
Access to new-to-the-market properties our buyers can see immediately
A large pool of interested buyers looking for the exact properties our sellers are offering
We pride ourselves on finalizing deals quickly and overseeing deals that benefit both parties.
Luxury Guest Services
You may have caught on by now that we don't manage just any short-term rentals in Scottsdale. We work with investors who own luxury properties and want to give their guests a high-end experience.
Luxury short-term rental guests have high expectations that include:
Access to unique and upscale amenities
Concierge-style services and 24/7 support
Modernity mixed with comfort
Pristine cleanliness
Luxury doesn't always mean sprawling square footage or gold-plated hardware, but it does mean quality. With Luxury Cashflow, you'll get the quality property management to complement your beautiful property, furnishings, and amenities.
Get Investors' Property Management in Scottsdale for a Better ROI
Now is a great time to invest in Scottsdale's thriving tourism industry and short-term rentals offer a great, scalable entry point. However, you'll also need to commit to full-time property management or outsource that work to investors' property management.
Are you looking to build a portfolio of high-end vacation rentals in Scottsdale? Luxury Cashflow can help from the moment you begin your search. Once your property is ready to go, we'll provide 1:1 boutique vacation rental management that you'll actually love.
Ready to learn more about our approach and pricing? Contact us today so we can start planning your investment growth.