As a vacation rental owner and occasional traveller yourself, you’ve probably already noted the difference between being the person who makes a reservation, and being the person responsible for delivering on one.
Choosing to rent your second home as a vacation rental is a big decision, but it’s just the first of many.
As you set up your rental property, things you’ve never given a second thought — how much a reservation deposit should be, for example, or the difference between a property manager and a caretaker — don’t just need you to take a position. Your business depends on you making an informed decision.
Understanding the lingo is an important first step! Some terms may seem straightforward or even simple common sense, but as they say: Context is everything.
Following are some of the more common vacation rental terms explained. Wondering about a term that’s missing from the list? Please post it in the comments section below.
Vacation Rental Terms: Starting Point
Vacation Rental — a furnished home (i.e. house, apartment, cottage) that is rented on a short-term basis (i.e. anywhere from a few days to a few months). Note that the term “vacation rental” is primarily used in the U.S.; other terms are used in other parts of the world, like “holiday home”, “villa rental”, “self-catered rental”, “executive rental”, “holiday let”, or “gites”.
Short-Term Rental — another often-used term for “vacation rental” that is commonly used in legislation connected to vacation rentals. Be sure to include this term in your search as you collect information.
Seasons (i.e. High/Low) — common travel industry guides that indicate portions of the year when a particular area is most popular (high or peak season) or less active (low or off season) in a typical year. Some areas also experience a shoulder season, a transitional period that is generally less busy but continues to draw significant numbers of tourists. This is one factor that’s important to consider when establishing your rates.
Your Vacation Rental Team
Depending on your level of hands-on involvement with your vacation rental, chances are you’ll have at least a couple of people on your vacation rental team. Here are a few possible cast members if you’re thinking of do-it-yourself management versus hiring a professional.
Property Manager — Licensed real estate professionals who oversee all business aspects relating to your vacation rental property, which may include maintenance, liaising with renters, and tracking finances. Actual requirements may vary from state to state (or between countries), but licensing generally requires an educational program that covers industry-specific topics like licensing, contracts, law and ethics (example from the Texas Real Estate Commission). There are also related professional organizations, like the Vacation Rental Managers Association.
Caretaker — Generally focused on the maintenance of your property, a caretaker may or may not connect with your guests. A caretaker is not a licensed professional, and is generally used as an alternative to having a property manager (i.e. you would not likely need a property manager as well as a caretaker).
The Reservation Process
Inquiries — When people contact you to get more information about your vacation property. This is generally step one in getting someone to make a reservation; check out our tips to converting more inquiries into actual bookings.
Bookings — The confirmed reservation that puts a paying guest into your calendar.
Online Transactions vs Online Bookings — While a booking is a confirmed reservation, online bookings are subtly different, like an “availability inquiry” that has yet to be confirmed, rather than a solid reservation. Online transactions, however, take a guest from flagging their particular dates to making a deposit. While still new, this is a trend MyVR CEO Jonathan Murray sees picking up steam over the next year.
Read more about deposits and policies you should consider for your vacation rental.
Reservation or Booking Deposit — The deposit you collect when a booking is made to reserve space in your rental calendar. This is generally applied against the overall rental fee.
Security or Damage Deposit — Collected in case of damage to the property, this deposit is refunded following a guest’s visit as long as there are no legitimate claims. An ongoing hot topic is whether owners should collect this deposit or charge a relatively minimal fee for insurance.
Pet Deposit — Collected from guests traveling with pets, this deposit is collected in addition to a security deposit in case of mishap. Some owners collect a pet fee instead of — or in addition to — a deposit.