David Malka | Better Vacations Las Vegas • Member since January 2016
This story starts in 2012, when David Malka purchased his first property in Downtown Los Angeles with the intention to rent it out through Airbnb during his upcoming travels.
Just like every other Airbnb rookie, David did everything wrong.
The first problem was that this property belonged to an HOA (Homeowner’s Association). Running an Airbnb within an HOA is a mistake 99% of the time, as most HOAs do not allow tenants for less than 30 days, which minimizes your nightly rate potential and reduces your profit margin. The second problem was that it was also not fit for keyless entry. As such, David spent his first year running around town and greeting guests for check-in, at all times of the day and night – handling emergencies first hand, dealing with lost keys, and avoiding the HOA’s management staff. This continued until a culmination of all his mistakes finally led to some intimidating letters from the HOA, followed by a prompt sale and exit of the property.
Despite his discouraging start, David quickly recognized the inherent value of the Airbnb arbitrage model. He had seen his Airbnb income cover his mortgage and operation expenses by up to 3x, compared to a typical long-term rental of 6+ months where you’re lucky to break even, let alone see a 10% return. After a comparative analysis of the property values and legislative stance towards Airbnb between Los Angeles and Las Vegas, David decided his next market would be Las Vegas, to where he was already frequently traveling for work.
By the end of 2013, David had purchased his first 2 homes in Vegas, targeting 4+ bedroom single family homes with pools and spas, and was grossing roughly 15% of the purchase price on each property. But he was still personally handling all pricing, inquiries, guest relations, cleaning schedules, synchronizing platform calendars, maintenance and more. This required so much management work and guest availability, and hardly allowed for vacation time. He didn’t yet know that there was a service available that would increase his revenue to 25% of the purchase price, and take most of this hectic management load out of his hands.
Once David began to use Guesty, a technology-driven solution for vacation rental companies, his income per property was boosted by over 30% and his business scaled at an incredible rate.
One of the most common mistakes that vacation rental property managers make, including David, is not utilizing all of the available platforms for advertising and marketing. Airbnb comprises only 60-70% of the American vacation rental booking marketplace, yet many property managers harbor steadfast devotion to them. While the notion of advertising on over 25 channels is a pleasant thought, in practical terms it is extremely difficult, so most property managers opt to just stick with Airbnb – occasionally throwing in the VRBO / HomeAway network.
The graph below illustrates that in early 2016, while Better Vacations was doing a great job at acquiring new properties and generating high monthly revenue, they could have been increasing their bookings by advertising on “non-Airbnb” platforms – which if utilized correctly can comprise ~30% of gross revenue!
When you are personally managing all aspects of your vacation rental business, it’s very easy to get caught up in a work mode that David calls “putting out fires:” when 90% of your day to day operations are spent managing your existing business such as communicating with guests, scheduling cleaners, and paying contractors, as opposed to focusing on growth and generating new business. One of the greatest challenges Better Vacations faced in 2016 was how to spend less time dealing with the day to day operations and spend more time growing the business, and Guesty was the ultimate solution.
“We were aware of alternative platforms available to advertise on, but in reality there was no way for a low staff human operation to manage 11 properties across multiple channels. The workload required to synchronize our calendars across 25 different websites for each of our listings, to ensure all of my employees had the correct logins and were getting properly notified of inquiries, to process payments and refunds across multiple channels – it just wouldn’t have been possible, or the workload would have eaten into our bottom line too much.”
The first and most immediate coverage provided by Guesty was the ability to delegate communications with guests and operations. The fact that Better Vacations is now able to have automated hooks through emails and texts that are sent to staff members notifying of new confirmations, modifications, and cancellations was huge – not only time-saving, but also more efficient. Scheduling mistakes were reduced to zero.
Now, not only does Better Vacations have up-to-date notifications for their staff, but also a staff management app where cleaners can confirm all tasks prior to arriving at a property. On-the-ground staff (such as gardeners) can make sure guests aren’t at the property prior to beginning a disruptive landscaping project. These tools freed up David’s time to focus on generating more business and revenue forBetter Vacations, and the results are significant.
As pictured above, November 2017 alone shows a 20% bonus in revenue generated by additional marketing platforms. This is made possible because Guesty’s platform allows property managers to list on a multitude of channels. The graph also illustrates a 300% increase in revenue over a 12-month period. In March 2016, David’s revenue was $30,000; by March 2017, it had skyrocketed to $90,000. Better Vacation’s growth had been previously stagnant as so many of their hours were spent ‘putting out fires.’
Guesty was a game changer for his business.
David is so impressed with Guesty’s consistent solution output that he will be visiting their headquarters this month to meet the team in person and learn more about what’s next on the horizon.
If you’re interested in learning more about property management and discovering the many ways Guesty's platform can help your business, we invite you to a free one-on-one session with one of our experts.