Instant Software Blog

Keeping Up With the Numbers: Don't Let a Flawed System Bring You Down

By Katie Kratzig, Business Development - Instant Software

“Accounting is the most important part of property management.  Reports that are easy to generate, read, and  understand are crucial for the property managers as well as the homeowners."  


Trust Accounting.  This is important to a manager’s reputation and regulatory compliance.

Simplicity.  You shouldn’t have to be an accountant to understand the statements.

Reports.  Reports are critical to the business - if something does not match, the accounting system must allow it to be easily rectified.

Customer Information.  The ability to use customer information (e.g., birth dates) for marketing purposes is a favorite feature.

Ease of Use in Fixing Mistakes.  When many people use the system, work orders can be entered twice and a vendor paid twice.  It is important to easily go into the program and fix the work order or correct another person’s mistake.

Flow.  Transactions must be easily traceable all the way from guest payments through to the operating end of company.

Accuracy.  Homeowners care most about the accuracy of income – precise commissions, correct work orders, and all expenses from each reservation.

Homeowner Statements.  Homeowners want their statements on time, and the format needs to be simple (understandable without any accounting experience).  Gross rents must be clearly stated, and homeowners want to see the income and expense for each reservation.  There needs to be explanation for expenses.  Any miscellaneous expenses must be easy to attach to the reservation.

Homeowners Access.  Homeowners like to access statements online.  They want to see their bookings and work orders immediately (e.g., to make sure that products under warranty are not repaired at extra cost by other vendors).

Guest Statements.   These need to be clear and easy to understand.

Booking on Rent-By-Owner (RBO) Sites

By Gorge Volsky, Instant Software - Director of Research

In my last blog, I outlined a scenario where RBO sites could do more harm than good for the industry.  I shared my view that, when using third-party listing sites, managers should insist that listing sites differentiate managed homes from rent-by-owner homes.

But do you have the luxury of boycotting RBO sites that refuse?  Not really. So your future lies in how you use RBO sites, and when.

I often advise clients to continue using RBO sites if they have been successfully doing so, or if their competitors are doing so.  I give this advice even knowing that it may help promote rent-by-owner and increase my client’s marketing costs over the long term.

Why?  Because a manager’s core obligation is to get bookings, however that must be achieved.  Or homeowners will switch to a competitor who is getting bookings. 

Protect Yourself. There are things you can do to protect your future:

• Don’t use RBO listing sites if there are equally good alternatives;
• Don’t list your best money weeks or desirable homes you can book yourself;
• Try to nudge a bigger share of bookings directly to your own web site;
• Never allow a listing site to advertise lower prices than can be found on your site;
• Favor listing sites that distinguish managed vs. unmanaged homes;
• Spread your listings among many sites (so no single site becomes dominant);
• Constantly remind these listing sites if their prices are too high;
• Tell them you will give preference to sites that distinguish managed homes;
• Support Discover Vacations in educating consumers on the value of a manager.

Most managers I know only use RBO sites to list a small fraction of their homes because:

• These sites are too expensive for most managers to list all homes on;
• Managers cannot pay steep listing fees in addition to their normal promotion;
• Most managers use these sites defensively because competitors do.

Why Should RBO Sites Differentiate Managed Properties? 

Managers provide services that non-resident homeowners cannot provide, and charge for these, making them more expensive.  When RBO sites decline to differentiate managed homes, they withhold information that would prompt some consumers to pay more money for a managed home.  This withheld information will favor self-managed homes.

By not identifying your company, RBO sites “strip” away your brand, depriving your company of the ability to differentiate your vacations homes based on the value of your involvement.  Again, this deprives renters of information they want to have.

Why Do RBO Sites Decline to Differentiate Managed Homes?

Who knows?  They may believe that the entire industry benefits if they can use their resources to divert hotel customers to vacation rentals.  RBO sites may be afraid that, by differentiating managed homes, they will tell hotel guests that some homes have less reliable service than others.  Why raise a concern that could slow industry growth?

The answer is that the entire industry will suffer more if hotel customers try vacation homes and have a bad experience because they didn’t know that self-managed homes come with less support.  The best approach is to give consumers accurate information.

RBO sites may also be afraid that they would lose the patronage of rent-by-owners if they differentiate managed homes (making managed homes appear to have more value).  But it is unclear to me where these upset homeowners might go.

Plus, companies like FlipKey are listing both managed and unmanaged homes and doing it right.  They not only differentiate managed homes, but they identify the management company, effectively preserving the benefit of any branding a manager has developed. 

But FlipKey goes a further step.  Its booking fees are lower than the leading RBO sites.  Since it is owned by TripAdvisor (and Expedia), it is clear that the big guns in travel recognize the importance of branding, differentiation of managed homes and lower fees.

It is simply a matter of time before the traveling public learns that managed homes offer more reliability and backup support than unmanaged homes.  RBO site managers must know this, and they must also realize that FlipKey and TripAdvisor are merely providing what consumers are using the new social networking to do:  allowing fellow travelers to advise them rather than relying on advertising or partial information from businesses. 

So are there other reasons RBO sites are so resistant to differentiating managed homes?  Are they merely trying to slow the public’s education until they find buyers who value the RBO listing sites without fully understanding that the public will eventually want to pay more for managed homes that provide more value to them?

Are they looking to find buyers who will believe that the quick rise of RBO listing sites will continue at the same pace and generate the same fat profits as did the first generation of rent-by-owner listing sites?   Dunno.  But it’s all prettying interesting

Next Week:  What is a Third-Party Booking Really Worth and How Much Can the Industry Really Afford to Pay?”