October 28, 2024 | 2.5 Minute Read
Back in June, I started exploring ways to boost bookings and occupancy across our 13 short-term rentals, which we currently list on both Airbnb and VRBO. The answer? Mid-term rentals. This type of rental accommodates guests seeking housing accommodations of 28 days or more — a huge, untapped opportunity primarily driven by insurance companies.
How It Works:
When homeowners are displaced due to property damage, they need temporary housing until repairs are completed. In the past, they would usually stay in hotels, with insurance covering the costs. However, extended hotel stays can be uncomfortable for families, and booking multiple rooms for a large family becomes expensive.
To address this, insurance companies partner with relocation firms to provide temporary housing by using short term rentals. These companies place families in homes rather than hotels, giving them a more comfortable, cost-effective solution.
I started by searching for “insurance relocation temporary housing” online, which led me to relocation companies contracted by insurance providers. Next, I looked for links such as “Landlord,” “Host,” or “Submit a Property” on these websites to list our properties. After submitting them property, we simply wait until contacted with a potential booking. Calling these companies doesn’t usually yield results, as agents handle multiple markets and are only interested when they have a specific need. When a relocation company reaches out, responding promptly is essential.
Here’s why this approach works well for us: with a larger portfolio than most local hosts, we can offer guests a full list of available properties when their initial choice may not be available. This way, guests have more flexibility and can select an alternate property that best suits their needs.
The Process:
Inquiry: A relocation company contacts us with a property inquiry either by email or call, requesting an initial quote for specific dates.
Options: I share a list of available properties and rates, offering the guest multiple choices.
Pricing: I remove all weekly and monthly discounts and provide a screenshot of the Airbnb rate for the dates requested, even though they’re not booking through Airbnb. Why? This helps standardize the rates and most likely the insurance carrier will use Airbnb to see if the rate you quoted matches Airbnb. I also remind them they’re saving the 15% Airbnb service fee by booking directly. Relocation companies rarely negotiate, so we can price competitively. We are careful that our rates match what is publicly displayed on Airbnb and VRBO.
Showing: The guest selects properties of interest, and we schedule a showing. Since these guests may stay for several months, they usually want to visit the property and neighborhood before committing. This is standard operating procedure.
Calendar Block: Once the homeowner (now the guest) agrees and the insurance adjuster approves the cost, we block the dates to prevent double bookings.
Agreement: The guest signs the Vacation Rental Agreement.
Payment: The insurance company sends the check overnight, typically in full, though monthly payment arrangements are an option.
After launching this strategy, we booked our first mid-term guest through a temporary housing/relocation company on July 15. Since then, we’ve hosted four mid-term rentals across three different companies:
The Hilltop: $32,455.70 (July 15 – December 15) – $5,409.28/month
The Argonne: $14,835.75 (August 5 – October 4) – $7,417.87/month
The Birchwood: $5,803.43 (July 9 – August 8) – $5,803.43/month
The Bungalow: $17,110.10 (October 22 – January 21) – $5,703.36/month (see check above. We received it October 23)
We grossed $70,204.98 which averages out to $6,083.48 per month. Not bad for properties that use to be long term rentals with Section 8 tenants averaging $900 to $1,150 per month.
Now that we’ve established ourselves with these relocation/temporary housing companies, referrals are on the rise, with agents recommending us to other agents. While we can’t meet every request due to availability, this strategy has provided far more revenue than expected. As the slower fourth quarter approaches, these bookings are a tremendous advantage both in our revenue targets and increased occupancy rates.
If you are looking to get set up with short term rentals, increase occupancy and revenue, streamline operations or create systems, please reach out to me at guru@rei.school. We are now accepting coaching students.