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7 Reasons People Prefer a Rent-by-Owner Vacation Rental

Dec 27, 2019 by Lena Katz
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While browsing recently through online reviews of a large condo-hotel complex where I was thinking of buying, I noticed a theme in the guest reviews.

The complex has a couple hundred individually owned units, so the star ratings were all over the place, ranging from "Stay away -- worst place ever" to "I book this specific condo every year for two weeks and love it."

And whether they hated or loved it, the main thing people remembered was the service. This is a massive, anonymous complex with management that only (barely!) cares about owners. There is no service in the common areas, except for a few gardeners and a million security staff. Thus, guest experience comes down to the service people receive from whoever looks after the unit.

If that was a third-party management outfit or an absentee landlord, every single problem, from inadequate towels to the queue at the security gate, was exacerbated to the point of being a vacation-destroyer. For units owned and managed by a responsive person living nearby, the same complaints turn into "The owner really tried his best … he really cared!"

At this point, I imagine some of your lips curling in irritation: "I'm an investor, not a butler. I hire a company to service guests so I don't have to."

And that's fair. But keep in mind that according to a recent iPropertyManagement roundup of vacation rental industry statistics, only 38% of owners who lease out their second homes or investment properties use a property management firm. And a lot of people still find the notion of renting directly through an owner one of the most appealing parts of a vacation rental.

Here are seven reasons your vacation rentals might get better reviews and more bookings if you're the primary point of contact:

1. Quick response on repairs or questions

Even people who prefer vacation rentals over hotels have been conditioned to expect hotel-level service; i.e., an immediate response to any problems that come up during their stay, no matter the time of day or night. This is a constant, whether the problem is maintenance-related or more of a request for information. A property manager may claim to have 24/7 service, but the only way to be sure someone's always on hand to respond within an hour or two is to do it yourself.

2. You know the unit better

A lot of people just want the ability to call or text a contact number and always get the same person, who is familiar with the booking, guest history, and special requests. This is even more important when someone in the party has special needs.

Many times, what seems to be a problem in the unit can actually be easily resolved by someone super-familiar with the contents and how they work: Gas grill not turning on? There's extra fuel in the shed. Guest left the garage door opener in the unit? No worries; you can open it remotely for them. Total knowledge of a property allows for quick problem-solving that no third-party company could match -- and hotels, in spite of having a hundred employees, probably can't either.

3. Insider knowledge of the area

This is one customer service category where local owners really can outshine hotels. Local owners are familiar with the area and have insider hookups that can improve the guest experience in many different ways.

This doesn't just mean arranging a welcome breakfast from the best bakery in town or knowing a free local sledding hill five minutes from the property that guests' kids will love (although, absolutely, guests love those kinds of perks). It can be something logistical that elevates the basic experience:

For example, at the large, anonymous condo-hotel I mentioned earlier, gate security is run tighter than the city courthouse. Anyone without their name at the gate does not pass. Many arriving guests are forced to wait for half an hour or more while security tries to contact the person listed as a possible owner/manager contact. But owners on a friendly basis with the gate security know how to make sure everything flows smoothly -- and that the right people always have the right contact information in case of any problems.

4. Feeling less isolated (if the property is isolated)

A strange sensation comes with arriving at a remote vacation rental late in the afternoon, unlocking the door, and walking into this unfamiliar home where you and the fam will be unpacking your belongings and going to sleep in a few hours. Every time I've done it, I feel like Goldilocks.

A fruit basket and a welcome note from the manager definitely helps lift the weird feeling. But sometimes, being able to text the owner and get a friendly, mundane response ["Welcome! I hope the snow wasn't too bad on the drive in. There's pizza delivery 5 minutes away if you don't feel like going out for dinner."] makes me feel more at home and less like some bears are going to arrive shortly and throw me out of bed.

5. Better deals

The fees that management companies charge are usually passed along to overall operating expenses, thus making professionally managed properties a bit more expensive than owner-operated ones. Even if it's only a 7% to 10% increase, people notice. Also, as an owner, you have the instant ability to negotiate if someone wants a better deal than the listed price for an extended stay or off-peak booking and you want to make them an offer rather than letting the place sit unrented.

6. One-of-a-kind decor

People who prefer vacation rentals to hotels often dislike the uniformity of design that's part of the chain hotel experience. If they're staying in the Keys, they want a funky bungalow. If they're in wine country, they look for a winemaker guest house. If you've put extra love and care into decorating your place, this type of guest will notice and appreciate it. And they do tend to look for rentals that aren't corporate-owned, because they want a place with a memorable back story and a proprietor to befriend based on their mutual love of unique decor.

7. The VIP treatment halo

Some of the reasoning behind the rent-by-owner preference is purely psychological: Some people still believe dropping the phrase "I know the owner" is going to get them better service and more respect. Business owners everywhere cringe at the painful necessity of dealing with customers who overuse this, but the type is unavoidable. It's really a business decision whether you want to delegate the annoyance or not.

If you can bear to put on a smiling face and confer that "VIP treatment" feeling just by giving a few extra minutes of your time, you could potentially gain a faithful customer for life -- who will likely also send their children, neighbors, and friends from book club to you for future bookings.

Do you want to be a hands-on owner/operator?

Think carefully here. People's reasons for preferring this type of rental are emotional or psychological as much as they are data-driven or cost-based. If you don't have a strong hospitality instinct, you might be better off losing a little money so you don't have to deal with guest personalities and emotional neediness.

On the other hand, if you manage your own rental, you have more control over every aspect, including deciding who gets to stay in your home -- and whether or not you're giving them your personal cell number.

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