The Vacation Rental Key with T and T
This is a podcast for professional vacation rental managers. Whether you manage 5 properties or 500 properties you can gain insight on how to run a successful vacation rental business by listening to T and T give their Keys to being the best.
The Vacation Rental Key with T and T
Episode 2 Touched the Stove Too Many Times: Vacation Rental Mistakes We Won't Repeat
What business practices will sink your vacation rental company faster than an anchor? Tim Cafferty and Tiffany Edwards pull back the curtain on the management pitfalls they've personally experienced in their latest episode of The Vacation Rental Key with T&T.
Drawing from decades of industry experience managing properties from Key West to Kauai, the duo counts down their top ten "No's and Never Agains" – practices they've learned to avoid at all costs. Each revelation comes with the scars to prove it, making this episode an invaluable resource for managers looking to sidestep costly mistakes.
From the dangers of guaranteeing rental income to property owners (spoiler: they never forget those promises) to the perils of the "$2 per unit" trap that can silently drain your budget, Tim and Tiffany don't hold back. Their candid discussion covers critical topics including proper hiring practices, the importance of documented processes, avoiding employee dependency, and the absolute necessity of never touching advance deposits.
One standout piece of wisdom: "I would rather train you and lose you than not train you and keep you." This philosophy underscores their emphasis on building strong company cultures with well-defined standards. Whether you're an established vacation rental manager or just starting out, these insights represent years of hard-won experience condensed into actionable advice.
Have your own "never again" moments to share? The hosts invite listeners to connect on Facebook or through their website. And don't miss their next episode focusing on owner communications – what to say, when to say it, and how to effectively engage with your property owners.
You're listening to the Vacation Rental Key with T&T, the podcast for vacation rental managers by vacation rental managers. I'm Tim Cafferty and I manage two companies, one in Virginia and one in North Carolina. I'm one of the two T's.
Speaker 2:And I'm the other, T Tiffany Edwards, born and raised in the vacation rental business. I help manage our family businesses from Key West all the way to Kauai.
Speaker 1:In the next 30 minutes we're going to give you our keys to success in the vacation rental business, to success in the vacation rental business. We're back and better than ever. I'm Tim and I'm Tiffany, Tiffany. I have had the opportunity to speak to some folks in the last week or so about our first episode and let's just say we have people listening. That's fantastic. Hello out there. So our first episode in the books and we're here for episode number two. We teased it last time. The knows never agains. And in our new style, Tiffany's come up with five, I've come up with five. So TNT have come up with 10 no's and never's for you today that we're going to cover in your vacation rental business.
Speaker 2:I'm excited, I'm really excited and I think we have the scars to prove that we've gone through these, and so I'm very excited to share. And I do want to say have had this experience or have this, no, never. It's not too late to make a change.
Speaker 1:Absolutely. I'll count mine down in five, four, three, two, one. You want to do the same?
Speaker 2:Yes, absolutely.
Speaker 1:Do you have an order that you think this is number one?
Speaker 2:I do so from least to the absolute. No. Never don't go near the fire. I've burnt myself too many times. Decision.
Speaker 1:Great, okay. So how about if we both give our fives and fours, and threes and twos, and we'll build to the crescendo of our worst at the last Okay? Let's do it All right, I'm ready. My number five is guaranteeing anything in terms of promises to property owners, particularly rental income I think that is one that I had to learn the hard way but especially newer companies and company owners. I guarantee I can get you 20 bookings.
Speaker 2:Can you really can get you 20 bookings, can you really? It's a sad day when you find out that you can't, and I will admit we have been in that, because when an area is so saturated and there's so much competition, you tend to do two things you lower your management rate or you create these guarantees because other people are doing it, and the end of the day it comes out of your pocket. That's a really good number.
Speaker 1:Five yeah, you have to write that check. Here's the other thing. You may have forgotten about that conversation, but I assure you the property owner will not forget.
Speaker 2:Yes, that's absolutely true, and we tend to get busy. So you're looking at revenue management, you're looking at revenue management, you're looking at everything that's coming in, but you're not necessarily looking at that exact number, and that can be a big, hefty check to write yes, okay, that's my number five.
Speaker 2:Number five. So my number five is not reading a contract all the way through. So many suppliers come in now with a link and you sign the last page and so you forget that there are several more pages that you need to read through, and usually it's your cancellation that is of most importance and what that date is, and so I would say again been burned too many times. Look through, request the entire contract and make sure that you read it all the way through, and this isn't just for suppliers, this is also if you're in a lease agreement. So any brick and mortar that you enter into, you have really got to look at that full contract and instead of thinking, oh, this is a good guy I've known for so long, read it all through what your liability is. Don't just sign the last page.
Speaker 1:Love that. I heard some scar tissue in that comment as well. I'll give you a real life example on this. One to the other side, tiffany, my brother is a successful commercial real estate developer in Washington DC. He got a letter at the end of February saying that Doge had decided they're going to cancel the lease agreement on the building that we're leasing for you, for one of these federal government agencies and Tom, my brother. Tim and Tom my parents were not very creative on the names, but Tom pointed out oh no, we have a lease agreement that is uncancellable until 2029. So he was actually in the Washington Post twice in the last couple of weeks about this and the lease prevailed, believe it or not. How about that?
Speaker 2:That's great language, and if he hadn't read it the whole way, he wouldn't have known.
Speaker 1:No, I don't think Mr Musk read that section, so anyway, okay, let's move on. Number four for me is something you just mentioned matching a commission that is below your standard. Well, so-and-so says they will do it for this percent. I am happy to sign with your company, but you're going to have to match this commission. Folks, don't fall into this trap. Or, if you do, don't ever plan on having an owner's gathering because you're going to say somebody go over there, that owner can't talk to that owner. That's not a good thing.
Speaker 2:No, and Tim, to elaborate a little on that, because I do think we all as property managers, and especially with our owner development, feel like we need to go a little bit lower. How do you even pitch that to explain your expertise and your services, so that you don't fall and you train your team members to not fall under that trap of a lower management fee?
Speaker 1:Absolutely. I have several sales agents that work here and one of them has been tenured for 25 years and this comes up quite a lot in real estate sales, as you might imagine, and one of the lines he uses is oh, I thought you wanted to sell your property, not just list it for sale With me, as a professional, this is what I need to do the job properly. I thought that's great language and it really speaks to what you're talking about. You should have analyzed what is the appropriate commission for your company and your arrangement with any particular owner, and that should be non-negotiable. Of course, you can always negotiate up, but it rarely will.
Speaker 2:You know I remember when my mom first started we were at 30% and how the mighty have fallen because our area is so saturated and you know we will not go any lower than what our amount is.
Speaker 2:So that's a very good one.
Speaker 2:My number four, and it is my, one of my greatest pet peeves.
Speaker 2:But when you sign up with a supplier or a vendor or you see something shiny in the hallways of a conference and they say, oh, it's just $2 per unit or it's just $5 per unit, and they usually grab someone from your team who's struggling with an issue and it's shiny and it's bright, and they come back to you to make a decision as the property owner or GM and you fall into this trap. Well, it's $2, it's $5, but you haven't done a full audit of how much you're actually paying to other companies of per dollar per unit or what you actually have as a software integration that may be able to provide some of these services. But my pet peeve on that is when I get stuck on a sales call and I'm not prepared for it because I've been told to join you know this for this great idea that can help us out, and then I'm stuck with a $2 or $5 per unit conversation. It doesn't work for me. You got to audit that stuff. You got to know how much you're spending per unit.
Speaker 1:You're talking about a return on investment here, as well as looking at programs that you may already have that are doing something very similar, if not the same right. Maybe we're not using what we have properly.
Speaker 2:Totally, and I think so. I've tried to really coach a lot of our team members up that. If they think that this is such a great decision, I want them to do an analysis. So what exactly is it fixing? What is the cost in an investment? Because a lot of people don't realize how much training it's going to have to provide. Are you going to have to pay more for your software to integrate with this product? How long will this training take? Also again to your ROI, how much more are we building off of this in terms of efficiency and driving dollars to the bottom line?
Speaker 1:Yeah, $5 a unit doesn't sound like much, but in my case that's a $24,000 a year expenditure. How exactly are we going to pay for that, right?
Speaker 2:And who's managing that?
Speaker 1:Not me. Okay, Good one. I hope you don't mind us holding the mirror up for you guys out there Don't mean for you to feel guilty about this. We're just talking about ourselves here right, yes, personal about this.
Speaker 1:We're just talking about ourselves here, right? Yes, personal, yes, it doesn't happen to anybody else, I'm sure. Okay, my number three on our countdown of top five no's and never again's poor hiring practices. You got to have a process, folks. You need to have an interview, you need to have a second interview, you might need to have a third interview. Make sure you get the right people on the bus and then the right people in the right seats on the bus.
Speaker 1:The only way that happens is if you think through that hiring practice. Do you have an outside agency that helps you screen? Do you have a process or a system that you work through to make sure the person is matched to the position? Do you even have a job description? For God's sakes, make sure you have those check boxes about where you will advertise what you're advertising and then, of course, when you bring them on board, making sure that they're who you think they are and you're who they think you are. And so just the whole poor hiring practice. I hear it all the time People whining about this person or that person. In fact, the matter is they probably shouldn't have hired them in the first place.
Speaker 2:Agreed. And Tim, how often do you bring in your team members to look at the job description? Because a lot of times when you rehire someone it's not for the same position, although it may be entitled, but the needs may change. So how do you integrate some of that conversation and not just make an easy first out of the gate hiring because it's the middle of high season?
Speaker 1:Oh right, yeah, and they did a great interview. Best sales job that person ever did was getting that job. You know what I'm talking about.
Speaker 1:Well, I'm fortunate enough to have a human resources manager, so that is the focus of that position to make sure those job descriptions are updated. But, yes, you need to bring the team in. We actually went through an exercise here about a year and a half ago where every person wrote down what they do. Then we matched that up with a job description. Oh yeah, we forgot about that. Oh yeah, oh this, oh, they're doing that. That's really not a part of that job. So it was enlightening to make sure we got on the right page there. But again, it is so tempting you were talking about the shiny objects at the conferences it's so tempting to hire that person. Oh my God, if I don't get this person, we are going to lose him, and that is going to be my next general manager. They'll be there tomorrow. Go through the process and get a process.
Speaker 2:That's true. There are so many people that have come into this industry that are capable or can learn, who may have a background of hospitality and to not feel the pressure from yourself or from other team members to hire someone quickly.
Speaker 1:I don't want to belabor this, but I do have one other tip on that, a pro tip, a key, if you will. A few years ago you know Steve Trover from Better Talent, he hooked me up with the Predictive Index. What a fabulous tool that has been for us, where it is an assessment of the driving forces behind a person, and I have yet to have a candidate when I explain how their profile came out, I've yet to have a candidate say no, that's not me. Most of them say oh yeah, that's exactly who I am, and you get red flags on that Like wow, that is really not what I'm looking for in this position and it's been a lifesaver for us. But again, going back to good hiring practices, Love it.
Speaker 2:My number three is, of course, advocacy related, but it is to absolutely know, or know one elected official or staff member or be in one degree separation of someone who knows an elected official or staff member.
Speaker 2:So we are located in many different areas around the country and I may not know a lot of the elected officials, nor do they care necessarily about me because I can't vote in that area, but I have really strong relationships with an individual who is close to someone who is an elected official or someone who's a staff member, and the reason why that's so important is because they're the ones who are going to let you know proactively if anything is changing in the area, anything's bubbling up.
Speaker 2:One of the relationships that we don't take advantage of enough is a county or city attorney or someone who heads up the land planning. So we build relationships with someone who oversees the short-term vacation rental licenses or permits, or we may have one person on a county commission or on a city council. However, an attorney is going to review all of the language or a county or city official will go to them to ask about language if they're thinking about changing something in an ordinance, and you'll get that first call. But the other part of that is that if you are the one degree separation, you have to support that individual. So if they call you to show up somewhere, if they call you to get owners involved, then you need to help support them so they don't feel like they're alone in the fight. And that has served us very, very well in all of our businesses.
Speaker 1:I love the idea of being able to pick up the phone and call my state legislator and him answering the phone and knowing who I am and I can talk intelligently about a subject and that took me about a decade to figure out, tiffany, but it is so valuable, that's a good one, very good.
Speaker 2:Yeah, and everyone gets so intimidated. But you have to remember these politicians are elected because you helped them out or you're a constituent of their area, so part of their job is to listen to you. Now, they all may not like vacation rentals, but find the ones that don't know enough about it and be the educator for that, and definitely stay with the staff, because the staff's there a lot longer than the elected officials.
Speaker 1:Donation to the reelection campaign doesn't hurt either.
Speaker 2:Always, always help there. Put it in the budget.
Speaker 1:Okay, all right, so we're down to number two on our top five for each of us, or 10 total, if you will, of those, and never again and I'm telling you we did not compare notes but our number two is so similar you took it a little further. So I'm going to start and you can pick up. So my no and never for number two is not having a process to fall back on, whether it be inspections of a property before a guest arrival, how to handle a lead that comes into your reservations department, how about entering a property into your software system? Oh no, sally does that. Well, sally, what exactly do you do when you enter a property? That tribal knowledge thing? You can't rely on just people to figure it out. You should have a process A to Z, and it is a complete pain in the. I understand, but those standard operating procedures about how you do is what makes your company different than Joe Schmo down the street who's renting anything with a door.
Speaker 2:And how often do you check those processes? Because obviously they evolve and they are a pain in the but how often do you check those processes with your team members?
Speaker 1:Okay, do you want me to give you a true answer?
Speaker 2:Let's give a hopeful, aspirational answer.
Speaker 1:Oh, aspirationally. Oh yes, we look at that annually, tiffany, it's reviewed by a whole staff and we critique it. And no fact of the matter is we went through the process once, about two years ago. We have not revisited on a regular basis, but we have relied on those documents. As new people come into the fray, you can hand them this document. Maybe you'll look it over, hand it over, go. Oh, wait a minute. We don't do number four anymore but the others.
Speaker 1:That's all good. The idea is sitting down and working through this process and, in fairness, when we did that, we came up with like 180 different processes, so it was a bear to get through and, of course, I assigned it to my assistant. She was on non-talking terms with me for a while, but we got it done and it's been very helpful. So I'm sticking with my thought there. On number two, 180,.
Speaker 2:I wouldn't be revisiting that for a while either. We're in the middle of reviewing our hurricane process and our action plan and I try to do that a little bit more frequently, but more so if we have new employees that come in and they need a little bit more direction or understanding that they have to show up because you're a property manager and you're there as the owner liaison, so if a hurricane happens, I expect you to be back in the office.
Speaker 1:All right. So how does your number two fit in with that?
Speaker 2:So that very, very much mirrors and is dependent on, I should say, my number two, and Ben, my husband, has phrased this, coined it owns it, but it is to not allow an employee to hold you hostage, and I have seen too many times. From visiting other companies throughout the years, I have again touched the stove many times on this, and now it is something we live by. But we tend to have employees and keep them on for two reasons. One, we build up this absolutely beautiful relationship and we feel guilty about not demanding more from the position, and so we let them stay for longer, or they oversee an area of our business that we don't feel necessarily comfortable about and they're siloed. So I see that a lot in revenue management, I see that a lot in accounting, and so you believe that they're handling everything, but you're not really involved in the ins and outs of that particular department. And so if that person were to leave particular department, and so if that person were to leave, you're in a big mess, and so we tend to allow those people to stay and have poor behavior or not live up to the potential of the job, because we're too scared of losing them in that department, because we're too dependent on them.
Speaker 2:And you know, I was thinking about this the other day and several years ago I listened to this comedian and he talked about this couple that needed to get into a breakup and he said that you know the one individual. Well, I can't break up with him. He's got my CDs in his car and so I can't you know, I can't leave. It'd be too difficult. I'm going to take two or three more years of torture through this and I think we do the same thing. It's a path of least resistance when really it's hurting our business and usually at that time that employee doesn't want to be there anymore. It's not challenging to them, it's not in the role is out, either outgrown them or they want to do something different. So it's better to just make sure that you're spreading out a little bit more and you're not becoming dependent, and we use a lot of consultants in some of those areas to prevent us from becoming dependent.
Speaker 1:This coming from the lady who, in episode one, who said her least favorite thing is HR, her number two is all HR related there, and I have a quick story, as I want to do. My father-in-law has a favorite saying Tim, you're not special and so we're not special when it comes to this. And I have an example of that. My wife and I have a property and we're doing some work on it now and we hired this landscaping service that she's very keen on and there's a gentleman that works for this landscaping service who is a complete tyrant Right, and he is working at our house and my next door neighbor, whom I have never met, somehow thought that this gentleman was me Came over very nicely to introduce herself and while the landscape work was going on, she was going to ask if we could trim this bush on the edge of the property line because it's blocking her view when she comes out of the driveway.
Speaker 1:So this guy goes on to talk about how terrible women drivers are and that bush ain't on our property. Lady, you can do whatever the blank you want to do with that thing and I'm busy, so please get away from me. Talk about losing business. And so I address the appropriate people at the landscaping. Oh well, you have to understand. He's so good at what he does Like really, is he that good that you just lost like every possible account for a quarter of a mile in either direction?
Speaker 2:There are a lot of components to a job. It's not just good at one factor of it. And if people are complaining you might need to listen up To go back. You don't to listen up To go back you don't rehire quickly Go through a process. Okay, so that brings us drum roll.
Speaker 1:please our number one no's and never's again on our list of things you should not do, and that is this is a double negative. You should not not train your staff to your standards. We have a lot of sayings around here. One of them is I would rather train you and lose you than not train you and keep you. That's number one. The other one is that if you have not bothered to train the person to your standards, whether it be a housekeeper, maintenance person, reservations agent or accounting you are relying on their last employer to be their trainer. And let me tell you my experience is typically we have to untrain people that have worked for other employers.
Speaker 1:No, that's not what we do here, Some of it flat out is illegal what I've seen people doing. But if you do not stand for something, you will fall for anything, and not having standards of training in place for whatever job it is is my number one pet peeve when it comes to. I will never do that again.
Speaker 2:How much of that too, tim, is a part of your culture, because there's training in the job of what your standards are, but I know that you have developed a pretty strong culture there. How much of that is making sure that they understand and they fit into the culture aspect?
Speaker 1:It goes back to one of my other things about the hiring practices. The last part of our hiring process is me. That's the fourth interview. I am the culture police. I want to make sure I feel like they have a fit here, because the fact is when I talk about training or whatever, I don't have to enforce the training Any of my staff when they see something that's not being done the way it should be done. You know, that's not how we do it here. We need to do it this way because that's the way we found it works best for our guests and our company, and I think everybody defends the brand and that's what I'm getting to. I guess we all stand for the brand. It's not just me. In fact, in previous podcasts we clearly identified I am not the face of the company. It's not just me. In fact, in previous podcasts we clearly identified I am not the face of the company.
Speaker 2:It's those guys out there in the field and I'm not necessarily as good on that HR side, but I think it's extremely important. My number one absolutely and not that I have done this before, but it is something that we have always, always lived by is do not touch your advanced deposits. So, tim, you're in a little different place. In North Carolina. You have a little bit more regulations.
Speaker 1:They have a special place for people that do that. In our state it's called jail.
Speaker 2:Yes, yes, and in fact, where I'm based in Florida, there is a lot more gray area. Although it is illegal, it is not to the same extent of where they require some of that funding to be like you have in North Carolina, and I have seen time and time again throughout the country of people touching their advanced deposits, and I actually know someone who did have to go to jail because of it. Do not get into that practice. It will not serve you well at all. I'm telling you, out of all of our numbers, that we have gone from five to one or 10 to one. This one is a biggie. If you're doing this, don't do it anymore.
Speaker 1:That's scary Good one, one I hadn't thought of, to be quite frank. So there you have it. That's our top 10 things that you shouldn't be doing. Do you have some more that we missed? Hit us up on Facebook or send us a message through our website, thevacationrentalkeywithtntcom. Anything else up your sleeve, that's good for this week. What do you think?
Speaker 2:I think that's good for this week. What do you think? I think that's good. It's brought up so many memories of problems and things I've had to go through. I might need a nice long bath and a glass of wine after this.
Speaker 1:You were going to do that anyway, you can't fool me. Okay, all right, next time we have a podcast coming back to you in two weeks, and next time we have another popular topic owner communications. Hmm, should we be?
Speaker 2:communicating with them? Are you communicating with them and what are you saying?
Speaker 1:That's right. Well, the answers to these and other mysteries will come to you on the next edition of the Vacation Rental Key with TNT. Thanks, tiff, see you next time.