Property managers have two main jobs: managing relationships with homeowners and delivering great guest experiences. In the vacation rental industry a lot of emphasis is placed on the guest experience, but for property managers, the owner experience is just as important. Without the homeowners there are no properties to rent to guests.

Managing homeowners involves a lot of work including, understanding your owner’s goals for the property, meeting those expectations, reporting on performance (revenue, occupancy, etc.), physically maintaining the property, managing the billing and costs associated with that, and much more. Property management companies all have different ways they approach maintaining current owners, attracting new owners, and managing their portfolio of properties.

During our 2024 ELEVATE Summit we spoke with four expert property managers Jodi Refosco of Timber Rock Village, Kerrie Racicot of Tahoe Truckee Vacations, Brian Olson of Beachcomber Vacation Homes, and Greg Petrillo of Pocono Mountain Rentals to hear how they manage owner relations. We gained insights on how owner expectations have significantly increased since the pandemic and how property managers are adapting to these changes.

How the pandemic has changed vacation rental owner expectations

During the pandemic there was a surge in demand for vacation rentals - as people fled the cities looking to have their own space, Airbnbs were the perfect option. To meet this demand, there was also a surge in the supply of vacation rentals. With low interest rates in 2020, more people could afford to buy homes or second homes to rent out. Fast forward to 2024, and supply of rental homes is still high, but demand from renters has decreased.

While this boost during the pandemic benefited the vacation rental industry in terms of awareness, homeowners who bought in at that time are still expecting 2020 demand and revenue. In this blog we’ll discuss how to navigate tough conversations with owners to set new standards post-covid.

How do you reset expectations with current homeowners?

For many property managers, it's easier to set expectations with a new homeowner than it is to reset expectations with current homeowners, especially homeowners who came on during COVID. To reset expectations, all of our panelists agreed that the best way to do this is to be proactive about communication and get ahead of it!

Kerri Racicot-Baitx said, “When we started to see a decline in ADR and a change in length of stay, or the booking window in late 2022, we let homeowners know immediately. We gave them the stats and information about the trends we were seeing in the market with documentation if they wanted to know more, and set up strategy calls to get ahead of it.”

Realigning with owners about what they can expect based on new market trends can help reset their expectations. For example, during COVID owners were using the home more frequently but, they were still making more revenue than they did before. Now, as demand has changed, property managers have to facilitate those tough conversations about potentially reducing owner usage to help reach their ROI targets. Realigning on those targets can help make those conversations more practical and less personal.

Here are some of the tips property managers offered to owners to increase revenue post-covid:

• Decrease your owner usage
• Add new amenities to stand out
• Make upgrades to the property
• Become pet friendly to attract more guests and collect additional pet fees
• Take new and improved listing photos

Sometimes you have to spend money to make money.

How do you set expectations with new homeowners?

In addition to the owners who bought during COVID, there are also a lot of new homeowners continuing to enter the market now after hearing all the rave about vacation rentals for the past few years, or you could be encountering new owners who are switching management companies. As property management companies are attracting new homeowners it’s important to set clear expectations upfront.

“ I like to under promise and over deliver.” This is Brian Olson’s approach to setting expectations with new owners. This method of giving new owners conservative estimates on ROI helps him keep owners happy year over year and reduce the amount of tough conversations.

Having open and honest conversations about what owners goals are, what their intentions are, what they’ve heard about the industry, and what they expect from property managers can help you align expectations from the start of the relationship. It’s also important to understand the supply in your market and how that owner’s home may or may not fit into your portfolio. It’s ok to turn owners down if their expectations don’t align with what you can deliver or the home doesn’t meet the standards of your portfolio.

Turning down owners might sound counterintuitive, but it can help limit the amount of hard conversations in the future. You don’t have to win every homeowner, especially now with the increase in supply post-covid.

Some homeowners are quick to jump management companies thinking that the downturn in revenue is from the management company not the market. However, once they hear the same forecasts and market trends from multiple management companies, they can better understand that this is a trend across the board. That’s why setting clear expectations upfront is so important right now and will help set up a better owner relationship down the road.

Differentiating homeowner personas

Owner personas have also significantly changed since the pandemic. As property managers, it's also important to realign your understanding of these new owners, as who they are and what they care about has changed. Greg Petrillo emphasizes, “Take the time to write these personas down and cater to them. Don't try to be too much to too many people.” That way, you can have more professional conversations with each type of owner and focus on what they care about to set realistic expectations.

Here are some examples of owner personas that our ELEVATE panelists cater to:

Investors

These are owners who purchased the property for financial gain. They don’t intend to visit or use the property themselves, it is just for rental purposes to make their money back. Their goal is to receive a return on their investment, so it’s important to set clear revenue expectations and communicate any changes that could affect earnings.

Second homeowners

These are owners who expect to use their second home as a vacation home and rent it out when they’re not using it. They are likely somewhat less concerned about revenue and more concerned about the maintenance and care of the home since they expect to use it as well.

Inheriting homeowners

These are often the children of second homeowners who are now inheriting the property from their parents. They often need more education on the industry and the property management process as they take over this responsibility from their parents.

First time vacation rental owners

These are owners who bought during or after COVID who heard about the boost in vacation rentals and jumped on board. They are often younger, tech savvy, interested in data and market trends, and are more willing to make updates to the home or amenities to optimize their listing.

Owner communication strategies

Managing consistent owner communication on a large scale can be difficult to maintain. Especially when dealing with issues or tough conversations it’s important to have a framework to handle these situations.

3 steps to effective owner communication

1. Acknowledge - Empathetically address and acknowledge the problem or concern that an owner has and agree that it is an issue you see and are working to resolve.
2. Educate - To the best of your ability, if appropriate, educate the owner on the cause of their concern. For example, for example, show them data and documentation on what the market is doing, and explain how they’re being affected.
3. Solve - If there's an agreeable solution, communicate your next steps for solving the problem. If not, come to a consensus on how you can improve the situation or have a mutual understanding.

Kerrie Racicot of Tahoe Truckee Vacations shared this actionable advice about creating frameworks for helping set expectations with owners and approach tough conversations.  

Breezeway owner reporting

Showcasing the full scope of your property management services to homeowners has never been more important. Breezeway’s owner reporting tools make it easy to generate shareable links and PDF versions of detailed activity reports to share your work with homeowners. Breezeway Insights helps you report on inventory costs, guest reviews, and revenue so you can come prepared to show owners the data how their rental is performing and showcase your professionalism.

One of the best ways Breezeway helps you manage relationships with owners is our solutions for owner stays. The feature allows you to classify and flag owner stays so you can keep your team in the loop and have a different turnover and inspection process for owner visits. For example, if you have different cleaning instructions for owner stays, you can create a customized checklist to ensure their bed is made just as they like it and everything is exactly where it should be in the kitchen. This ensures their property is prepared according to their preferences and standards, which helps you build better business relationships.