Fees, services can complicate rent-by-owner income in the Vail Valley
March 23, 2018
EAGLE COUNTY — Online vacation rentals are big business, and the business is growing.
A recent report from Airbnb states that guest arrivals in all Colorado markets grew 68 percent from 2016 to 2017. Statewide, that adds up to 1.2 million guest visits and $183 million in revenue.
In Vail, Airbnb accounted for 21,000 visits and $5.8 million in revenue.
Revenue, of course, is one of the big pitches to list a home as a short-term rental online. But the money isn't exactly easy, and there are expenses.
Jay Gould owns Vail Valley Getaways and recently co-founded TripsIn, a vacation home-listing site. Gould said people who rent their homes sometimes don't understand the expenses involved in short-term rentals. Gould said some owners feel like they "don't have to do anything."
But, he added, a vacation rental is like any other business — there are continuing costs.
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"If you own a business … you have to replace the office chairs once in a while," he said.
And individuals who list their units online have to cover all of those expenses.
"That's different from a long-term lease," Gould said.
In the town of Vail, new regulations recently went into effect that require those who list their units online to purchase a $150 annual license from the town. Owners are also responsible for the 9.8 percent lodging taxes. The regulations also require a local contact to resolve complaints. In addition, a sales tax number must be posted on all online listings.
East West Destination Hospitality manages a number of short-term rentals in the Vail Valley. Tom Puntel, the company's vice president of sales and marketing, said his company can be "a great partner" for those who need to find property managers for their Vail Valley rental units.
Puntel added he has seen a number of people come back after trying to go it alone.
"They might list for a while, but then they tend to come back," Puntel said.
As an example, Puntel said one current client tried listing without a management company. The client's first guest walked into a unit that needed to be cleaned.
A call to the local contact didn't work — the person was waiting tables at the time.
The client called East West, which handled the problem immediately. The client immediately came back to East West.
Gould said some owners complain about management fees. But, Gould said, owners do receive cleaning and other services for those fees and don't have to find service people on their own.
Stick with on-site management
For those with units in large properties, Gould generally recommends staying with on-site management. Owners have to pay someone to do the essential work, he said. It might as well be the people already on site.
Puntel said the charges at East West Destination Management can vary, depending on the unit, the neighborhood and services an owner might want.
What owners want can generally be broken down into a couple of categories, Gould said.
Some owners are simply looking for cash flow on their investments. Others, Gould added, want their vacation homes to essentially pay for themselves. With taxes, association fees and other expenses covered, those owners can simply enjoy their vacation homes.
But while short-term rentals are functionally similar to hotels, Gould noted that those units are owned by individuals. That can sometimes be a problem.
Having people stay in your place "is a mindset," Gould said. "Sometimes people think about it and just don't want people to stay at their place."
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org and @scottnmiller.