We all know how important reviews are when it comes to our revenue with our short term rental, but how much of an impact can it really have on your revenue?

I spoke with someone recently, and I was blown away at the difference and how much they’re making this year, working with property manager, that unfortunately had really bad reviews, versus them self managing just a year ago.

So I want to break that down this week, and also just highlight the important pieces that you need to have in place to get good reviews.

Stay tuned, let’s jump right in.

Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actionable items to acquire, manage, and scale your portfolio.

I’m your host, Tim Hubbard.

Well, welcome back to the show, I’m glad you’re here again.

There’s really only three pieces that determine how much money we make with our short term rental.

The first one is the actual property itself, how well you did setting it up, how well you did setting the expectations for your guests.

So think things like the copy that you put in there and your photography.

So that stuff’s pretty much a no brainer, right?

We know that we have to have a good property to start with.

The second piece that we talk about a lot on this channel, if you missed last week, go back and check that out.

It was one little metric to help you identify whether you’re pricing your property too high.

And that episode was just one little piece of the bigger picture, which is revenue management.

So there’s a lot, a lot that goes into that.

The third piece is your reviews, how good your reviews are, and how many of them you have.

So I spoke with someone recently who has a great property.

They did a great job setting it up, and for the first year, they were managing it themselves, and they made about $75,000.

They got busy, they have a full-time job, and so they passed off the management to a company you’ve probably heard of, Evol Vacation Rentals.

They’re managing over 35,000 properties in the US, and so they are around, but unfortunately, their reviews are dropping.

Not in all the markets, but you can simply go on AirDNA, and you can look at the nation’s biggest property managers, so Evol Vacation Rentals, Vacasa, Red Awning, and you can see that their average reviews are very, very bad, and unfortunately, they’re getting worse.

And so with this particular person, they saw their revenue drop from 75,000 to year to date, so we’re more than three quarters of the way through.

They’ve only earned 23,000.

And the sad thing is, after looking at the listing, that’s not that surprising to me, because people are not booking properties with a 4.3 or a 4.4 review average, and they’re not really showing up on the listing sites, right?

In fact, Airbnb is taking down a lot of listings that have really poor review scores.

So that is a massive, massive difference in overall revenue.

And I don’t want to beat up on the big box property managers, but the reality is, when someone goes to book one of these properties, and let’s say they’ve heard the name Vacasa, or they’ve heard the name of all vacation rentals before, and they’re not booking it directly with Tim, or with John, or with Sarah, whoever it happens to be, well then, they’re already gonna have a little bit of that mindset, if again, they’re familiar with the property manager, and that’s probably gonna affect their experience, right?

If they’re receiving messages that are really automated, they’re not personalized, there’s no sort of hospitality there, well then, that average review score is just going to keep going down.

And unfortunately, sorry, I hate to beat up on these big property managers, but if your property is with them, and your review score is declining, you’re going to have to start over if you decide to manage it yourself, or you decide to work with someone that’s managing it for you, and allows you to keep your accounts like we do.

So I don’t want to freak anyone out there, but if you’re in this position where you’re seeing your reviews drop, then you might want to consider some other options.

If you are self-managing your property, which is much easier to do today than it’s ever been, if you’ve been listening to the show for a while, you know we’ve talked about a lot of the things can help you do that.

And I hope you’ve found those topics valuable.

My team and I have managed over 40,000 guests these days, and we’re in a lot of different cities.

And all the partners we work with, we do allow them to keep all of their accounts.

And so we’re sort of like a white label management company, you could say.

John Smith adds his listing, and we’re helping out in the background.

So let’s dive into how we earn good reviews just for a quick second.

If I had to choose one thing, the most important piece to earning good reviews, it comes down to communication.

We know that we can have some disaster maintenance happen, our properties, or storms can come through, or we can drop the ball with our property.

Maybe we forgot to leave towels there.

Crazy things like this, you can still earn really good reviews if you have really good communication.

Really, that’s all it comes down to.

And so you’ll notice if you look at a property profile that has really good reviews, it gets mentioned time and time again.

John responded super quickly.

They were super hospitable.

They did a great job with communication.

That is really, in my eyes, the most important piece.

As we know that two properties are pretty much identical.

One can really outperform if they just do a much better job on the communication.

So make sure you’re responding really quickly.

Make sure the words that you’re using are guest-centric, right?

They are the reason that you’re operating your short-term rentals.

So you never want to put the blame on them for anything, accuse them of anything.

A lot of this is just obvious, but we still see it all of the time.

So I just wanted to give you a real quick snapshot, a real glimpse into what I’m seeing these days, talking with owners all over the place.

For a while, I’ve wanted to know how much a review or a bad review score can actually affect a property.

And now we’re seeing some real world data.

So if you’re in the position where you’re managing your property yourself, just make sure that you’re doing these things like we’re in the hospitality business, right?

And if you have gotten some reviews that you think are unfair, well, I would try to get those removed.

Our team’s gotten lots and lots of reviews removed.

There is no time limit on it.

So if you received one two years ago, you can still try to get that one removed as long as it violates one of Airbnb’s policies.

Again, we’ve talked about all this stuff before.

I just kind of want to wrap it up and just remind everyone how important this really is.

So it just comes down to these three pieces we have to make sure that our property, number one, is set up properly, that we’re setting the right expectations.

That doesn’t mean you have to have a super luxurious property.

It just means that what your guess is expecting has to match the way that your property is portrayed and the way it comes across on the online listings.

The second piece is revenue management, and making sure that you’re on top of all this.

Drove into that a lot.

And then the third piece is remembering that it really comes down to communication and hospitality.

We’re in the hospitality industry, and if you don’t get this piece right, it can be a very slippery slope.

You can literally cut your annual revenue in half, and we don’t want that happening to any of you.

So I feel like this was just a bit of a lecture.

I’m sorry if it came off that way, but this is a really, really important topic.

And if you’re in that situation where you’re with a company and the reviews are not good and you don’t actually own your account, well, then you might want to plan your exit strategy because we’re seeing these big companies with tens and thousands of reviews, their actual average is just going down further and further.

And so that’s a bit of a slippery slope.

And if I could leave you with just one last thought, and that is, yes, there’s a lot of things that go into these review scores and making sure that the average is high, but it doesn’t mean that you actually have to be doing all of that communication, or you have to be doing all of that work, right?

I know it’s hard for some of us that want to scale.

I went through this myself, bringing someone else on and trusting them.

But the reality is, whatever happens during that guest day isn’t really going to affect your revenue.

The only thing that does is the review.

That’s it.

So even if the guest didn’t have a great time, of course we don’t want that to be our guest, but if something came up and you handle it in a good way, or your team handled it in a good way, it doesn’t really matter what happened.

As long as you got a good review, so we got to put a lot of focus on the reviews.

We’ve got to make sure that we’re asking for reviews.

We’ve got to make sure that we educate our guests on what’s a five star versus what’s a four star.

And if we get a review that we don’t think is fair, well then we definitely want to reach out to the OTAs like Airbnb and try to get that removed.

So sorry for the bit of lecture this time, but I just want to make sure that all of you out there are not going down the slippery slope like the gentleman I just spoke to recently.

I hope that gave you a little bit of insight.

And until next time, I hope you have a fabulous week.

I’ve dedicated years and hundreds of thousands of dollars through trial and error to figuring out how to manage my personal portfolio remotely.

And it wasn’t always easy and it took a long time.

But now my amazing team can professionally manage my properties without me.

And good news, our team can also manage yours.

Let us save you the stress and headaches and some money by offering you an industry low fee.

To find out more about partnering with us, head to strriches.com, hit the property management button, answer a couple quick questions, and meet with me personally.

That’s strriches.com.

Rest easy knowing that with my team, your properties will be in excellent hands.