Homeowners with rental properties often have a hard time figuring out how to manage the residential use of their rental dwelling units effectively. While many services now can assist rental property owners online, still, it is important to pay attention to your actions and decisions when it comes to potential guests.
As ADUs, or accessory dwelling units, have recently become extremely popular long-term and short-term rental properties among landlords, the interest in their proper management has increased as well. These specific units are not similar to the entire home when it comes to renting. To get new bookings regularly and attract good customers, you should learn several tips and rules for handling reservations and unexpected troubles.
If you are a homeowner with an accessory dwelling unit (ADU) and you want to rent it out without any problems, we highly recommend you go through this article. Here, we will talk about some of the crucial points in ADU rental management and give you advice on handling any potential challenges.
When you have an ADU vacation rental to put out on the market, it is important to have clearly defined booking requirements. Even if you feel like you have the entire property under control and you do not need to invent any house rules, a booking policy for a vacation home is a must. It will make your life easier by giving you more time for day-to-day tasks, as you will not have to explain all the rules of booking your rental ADU to each interested guest.
For both long-term and short-term rentals, you, as a property owner, should specify what is the price per day, week, month, or year, depending on your preferred rental period. Another point to specify is the suggested purpose of stay. For example, some ADUs serve better as short-term rental units for those who have a business activity or a work trip in the city. However, these are only the suggestions that should signify to the potential renters whether the property is suitable for them or not.
In general, a good booking policy can benefit owners of short-term rentals and long-term rental places in the following ways:
In your booking policy, take into account all the possible problems that might arise. Specify what the deadline is for short-term rental use booking. Also, your vacation rental booking rules should have information about cancellation, prepayment, and any fees that might be included in the price.
Especially with short-term rentals, it is quite common for guests to cancel their booking due to unexpected emergencies, changes of plans, or any other life situation. To make sure that your ADU investment property does not become unprofitable, you should establish cancellation rules for your residents.
First of all, it is important to specify what period of cancellation leads to what consequences. For example, multiple platforms for rental listing offer different solutions for when a tenant cancels a month or a week in advance, the week of moving in, and after the first day of booking.
Second of all, you need to specify when a cancellation fee will apply to a guest. However, if you are renting out your accessory dwelling unit any other way, it might be useful to check the common practices of applicable fees in your area.
Do not forget to state when the non-refundable period starts and when the cancellation fees might be applied. This is especially relevant for those interested in short-term rental activity.
In your long-term and short-term rental regulations, you should think about the situation when a double booking accidentally occurs. As this is less likely to happen with long-term rentals, such as live-work units, short-term rental operators should have a clear system of tracking tenants and their stay periods.
If you are listing the property online, make sure to check your email, messages, and website notifications constantly. With online platforms, the process of tracking guests has become much easier, as everything is automatic, and a guest will not be able to rent unless the place is vacant.
However, if the situation of overbooking occurs, think about what you can do to minimize the damage. One option is to offer compensation to the guest and suggest other good accommodations in the city. Another option is to offer a vacant space that you might have in your main house and rent it out instead.
Some of the specialized platforms for long-term and short-term rentals have specified the rules for double-booking cases. For instance, those who put rentals on booking must provide guests with other living places in the city while paying for their transportation and the difference with the initial renting price.
Any short-term rental host of an in-law unit should be ready for unexpected cancellations. In such situations, property owners can oblige a guest who did not show up to pay a fee or pay some part of the rent, depending on how late the cancellation occurred.
To decrease canceled renting, make sure to stay in touch with the potential tenant before they come to stay. Building good communication can help you and your guest to resolve any misunderstandings in advance.
Remember that frequent cancellations of your property might turn into a bad sign and give your rental a bad reputation. Thus, preventing such problems should be one of your priorities.
Another thing that should be under your control is the fact that residents might want to change stay dates, number of guests, or any other booking detail. The owner of a rental dwelling unit should be ready to react to any changes quickly and properly.
Here, once again, we must highlight the importance of tracking the stay dates of all of your guests. With short-term rentals, it might get hectic, especially if the vacation season is approaching. To make sure that no dates overlap and that you do not create chaos in your short-term rental, consider getting a property manager. A property management company can handle all the rental questions, or you can pass just a portion of your responsibilities to them.
Especially with a short-term rental, all throughout the calendar year, you will get different tenants, and some of them might be up for a conflict that cannot be avoided. Well, you are the owner of the property, and you should be ready to take responsibility for all the problems or fight against false accusations.
Some of the most common conflicts that arise with the rental of ADU property include the following:
In the majority of cases, no one wants to take the case to the court. You should always try to talk through all the problems and find a compromise that would satisfy both sides. Another solution is to get a mediating side that would consider different points of view and offer possible outcomes. If the problem still does not seem to be resolved, you can ask for professional lawyer consultation.
If the rent has been canceled, and you need to return the money, you should do it according to your return policy. Nowadays, many rental Internet services offer automatic refunds. However, some of them only offer the services of listing, while all the payments go directly to tenants.
When a guest has requested a refund, send them your pricing policy first and ask whether they have known about it from the beginning. Then state what sum you are ready to refund, and if you are met with an agreement, then you can cancel the booking.
However, if some problems might arise, you can always solve them according to the ways suggested in the previous section. Managing finances and properties can be hard, so you might want to seek professional legal assistance if the case gets too complicated.
Do not turn your rental unit simply into a matter of strict business. You should always speak with your guests and be ready to communicate with them at any time. There might be some potential visitors who are interested in details about the housing that is new to them. You might need to explain some new additions and updates to the pricing policy immediately.
Keeping in touch and being available at all times might save you from unwanted cancellations and gain the trust of others. Make sure that your tenants see that you care about your property and find the right people to live there.
The technologies have made it easier than ever to control any kind of rental business. Homeowners can now simply add features specific to their property, set the prices up, and control the availability from time to time. Popular renting websites now offer automatic cancellations and changes to the booking so that tenants do not have to negotiate with the property owner every time they want to change something.
Such additions to popular services have certainly made it easier for both tenants and residents to regulate their booking. Still, personal communication between the two sides is necessary in order to make sure that no problems arise.
If you are a part of the rental management team or you have your own company that works in the rental industry, teaching the staff how to avoid common mistakes with rental units is extremely important. It will help you to cut all the potential losses, increase the benefits and efficiency of your property use, and develop stronger relationships with potential tenants.
Thus, owners and managers of accessory dwelling unit rentals should be extra careful about their booking and pricing policies. Follow our simple advice discussed in this article and enjoy fruitful results of your work.
Whether you have a long-term or a short-term rental, make sure that you specify the payment terms, the maximum and minimum number of days available for booking, and the number of vacant places you offer. Also, clarify the return regulations and whether there are any fees for last-minute cancellations.
A good ADU owner should keep track of all the rental records to avoid overlapping and be aware of the situation. Also, you should always keep your property well-maintained and resolve all issues promptly. Keep good relationships with your tenants and communicate with them on all matters concerning their life on your property.
Owners of long-term and short-term rental ADUs might come across some problems with unexpected cancellations. Also, a tenant might start a dispute regarding the conditions of the living space, booking details, payments, or any other thing connected to your property. To resolve all those issues, a landlord should develop proper rental management skills or hire professional managers.