How to start a short-term rental business that beats the competition

  • Erica Beers and Rebecca Slivka began targeting Los Angeles business travelers who needed accommodations.
  • Five years later, their properties are a paradise for travelers who can work remotely.
  • The pair shared 5 tips including breaker boxes and how to get five-star reviews.
  • See more stories on the Insider business page.

When Erica Beers and Rebecca Slivka started their short-term rental startup Pillow and coffee in 2015, they targeted business travelers who needed accommodation in Los Angeles.

Five years later, their properties have become a haven for clients looking to travel safely and work in new environments during the pandemic.

“People just want to get out of their homes,” Beers said, noting that the Pillow and Coffee properties are rented out through platforms like Airbnb, Vrbo and “People feel more secure in short-term rentals than in hotels.”

Airbnb’s recent earnings report echoes Beer’s observations: Company revenue grew 5% in first quarter to $ 886.9 million as pace of vaccinations prompted more people to travel .

In 2020, Beers and Slivka have withdrawn from the day-to-day management of rental spaces. Today they run the property of eight owners and run a motel called Hicksville Pines Bud and Breakfast and Hicksville Trailer Palace, a venue in Joshua Tree, Calif. that houses trailers and amenities like a swimming pool, shuffleboard, and archery range.

In 2019, with the duo still focused on short-term rentals, they reported $ 3.8 million in revenue, nearly $ 800,000 more than the previous year, according to documents viewed by Insider.

Identify your target customer to personalize the experience

Beers and Slivka suggest that entrepreneurs start by determining the customers they want to serve. When they settled on business travelers, they said the market was not yet overcrowded, which allowed them to carve out a niche in the industry.

“This is what allowed us to focus on a niche in our market,” Slivka said. “Our properties mimic the audience we try to serve.”

Identifying your customer base will dictate the types of properties you buy, the location of those homes, and the amenities you want to offer, among other things, the duo said.

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One of the properties of Pillow and Coffee, which serves business travelers.

Courtesy of Pillow and Coffee

Location, location, location

Beers and Slivka knew their guests didn’t need excessive space, unlike families looking for vacation homes, so they looked for studios and one-bedroom homes in trendy Los Angeles neighborhoods. Pillow and Coffee has properties in Hollywood, Silver Lake, West Hollywood and downtown Los Angeles.

They knew that potential tenants would want to be close to town for an easy commute, sightseeing, and entertainment such as dining and nightlife.

“We wanted people to be able to park their cars and walk to the cafe or breakfast and feel comfortable in the city,” Beers said.

Adapt the amenities to your customers

Once you’ve picked your ideal client, make sure your potential properties have the essentials that these people will need and want, Slivka said.

For example, when the two men were buying rental homes, they would always check the breaker boxes, where electricity is distributed throughout the house. Many older homes in Los Angeles only have two circuit breakers, which gives enough power to run about two large appliances, the pair said. Since most tenants want the refrigerator, air conditioner and microwave to work simultaneously, these properties were not suitable for Pillow and Coffee operations.

Then include the necessary living amenities for business travelers, such as desks, high-speed internet, living spaces, and of course, a comfortable place to sleep.

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Whatever you do, don’t take photos of your rentals with your iPhone.

Courtesy of Pillow and Coffee

Do not take photos on your iPhone

The next critical step in building your short-term rental business is taking great photos, said Beers and Slivka.

“The two things that will sell your unit the most are the location and appearance of your photos,” Beers said. “It can’t be something you took on your phone. It won’t sell as well as professional photos will.

They suggest hiring a photographer who will capture all angles of the property. This way, guests are not surprised when they introduce themselves.

“You really want someone to be able to see and understand space,” Beers said. “No one wants a surprise by booking a short term rental.”

How to get five-star reviews without asking for them

Business owners should strive to make their customers’ experience as special and personal as possible, Slivka said. Instead of just recommending restaurants in the area, ask the tenant what type of cuisine they like and suggest restaurants based on their opinion.

“Even mention one of your favorite dishes there,” Slivka said. “Give something a little more personal when you can, because I feel like it goes a long way.”

In addition, make it a habit to check in regularly with your guests. Beers and Slivka rely on automated messaging to ensure they reach tenants throughout their stay, from the moment they arrive. That way, if there is something wrong with the place, they have created an opportunity for someone to express themselves.

“If they’ve arrived and there’s a problem, you’re going to find out right away,” Beers said. “Or if they have a question, you’ve already opened the door for them.”

The purpose of routine messaging is to provide a positive experience and reduce the chances that a guest will not raise an issue until they review their stay.

Finally, avoid asking customers for a five-star review, no matter how tempting it is.

“You never ask for a five-star review, that just doesn’t suit most people,” Slivka said. “If they didn’t have a five star experience, why would they give you a five star review?”

About Jermaine Chase

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