Operating notes for people running short-term rentals as a business. Regulation changes, pricing tactics, owner-reporting playbooks, and turnover systems for STR co-hosts and small property managers — no "passive income" hype, just the stuff that keeps clients past year one.
Your rate floor should come from your cost per stay, not your neighbor's price
|
Most co-hosts set a rate floor by checking what the unit next door charges, and that tells you nothing about whether you make money. Your neighbor may have a paid-off mortgage, a cleaner who charges half what yours does, or no management fee to split. The only floor that protects you is built from what it costs you to host one stay. Add up what one turnover costs before the guest sleeps a single night. Take the cleaning fee you pay, the laundry, the restocked supplies, and any per-stay charge from your software or lock vendor. Say that comes to $95 for the clean and $12 for supplies: $107 per turnover, whether the guest stays two nights or six. Use your own numbers, since these are only an example. Your floor is different for a 2-night stay than for a 6-night stay. Divide the turnover cost by the number of nights. At $107, a 2-night stay carries $53.50 of fixed cost per night, while a 6-night stay carries about $17.80. If the guest pays a $60 cleaning fee, subtract that first and the gap narrows, but it never disappears. This is why one flat floor is wrong in both directions: too high for long stays, so you turn them away, and too low for one-nighters, so you lose money on them. Build the floor first, then compare it to the market, in that order. The formula is simple: the fixed turnover cost per night, plus the variable cost per night (utilities, platform and management percentages), plus the profit you need on that unit. Only then look at comps. If the market sits under your floor for a date, that is useful information, not a reason to cut. Raise the minimum stay on that date, block it for owner use, or accept a thinner margin on purpose and write down that you did. Show the owner the floor once, in one line, and update it when your costs move. A sentence like "we won't book a 2-night stay under $X because it loses money" ends most arguments about why the calendar has gaps. Recalculate whenever your cleaner raises rates, because the floor moves with them. Owners forgive a decision they understood in advance far more easily than a surprise on the monthly report. |
The Co-Host Brief
Operating notes for people running short-term rentals as a business. Regulation changes, pricing tactics, owner-reporting playbooks, and turnover systems for STR co-hosts and small property managers — no "passive income" hype, just the stuff that keeps clients past year one.
Most supply runs are triggered by a guest message, not by a count. The first "we're out of toilet paper" text is the moment you learn the closet was empty. By then you're buying at retail on a Saturday, and the guest has already decided what kind of host you are. Running out is a systems failure, and a cheap one to fix. Set a par level for every consumable at every unit. Par is the minimum you must have on the shelf after a turnover, written as a number. For a unit that sleeps four, something...
A permit that lapses by a day can cost an owner more than a bad week of pricing. Whatever your market requires, whether a license, a registration or a tax account, it has a date attached, and when it lapses the listing may have to come down until it is sorted out. Nobody notices a renewal date until it has passed. Across ten units that is ten permit dates plus the tax filings behind them, and you are usually the only person watching. Build one sheet with one row per unit. Columns: city or...
Most co-hosts set the cleaning fee in week one and let it drift away from what a turnover actually costs. Your cleaner raises the rate by $10, laundry moves to a service, soap and coffee get pricier, and the fee guests pay stays exactly where you typed it on day one. Run that across eight units for a year and the gap has to come out of somebody's margin. It's usually the owner's, and they find it at the annual review. Build the fee from the real cost of a turnover, not from the listing next...