Mike Savage has owned both long-term and short-term rentals — and he sees a fundamental difference between the two.
With a long-term rental, investors can improve a property and potentially raise the rent, but the market largely determines what a comparable home can earn. A three-bedroom, one-bath house will generally command something close to what similar homes in the area rent for.
A short-term rental offers more room to influence revenue, but it also requires more work.
“You’re choosing to open a business” when you buy a short-term rental, Savage told Business Insider. Investors need to think beyond the purchase price and location to operations, maintenance, guest communication, hospitality, marketing, photography, and listing descriptions.
Savage started buying short-term rentals in South Carolina in 2017. At the time, he said, simply leaving guests a nice note and a bottle of wine could be enough to earn five-star reviews.
Today, with stiffer competition, that’s no longer enough.
Savage, who quit his day job as a firefighter to invest full time and grow SynergyStays, a revenue-management business for short-term-rental owners, shares three strategies he uses to help properties perform better.
1. Pay attention to the median booking window
Short-term-rental owners often focus on occupancy and average daily rate, or ADR. But Savage thinks an equally important metric is the median booking window: how far in advance guests typically book a given date.
Knowing that number can help owners decide whether to hold their rates or lower them.
Courtesy of Mike Savage
If guests in a market typically book about 30 days ahead, for example, an owner trying to fill a date 60 days out may be able to hold rates relatively high. There is still time for demand to materialize. Once a property enters its typical booking window, however, it may be time to consider lowering rates.
Owners should try to avoid relying on last-minute bookings, which can force them to offer deeper discounts to fill empty nights. Savage called falling into that last-minute cycle “probably the No. 1 flaw” among owner-operators who manage their own properties.
2. Focus on weekdays, not just weekends
It is relatively easy to fill Friday and Saturday nights, Savage said. The bigger opportunity is often Monday through Thursday. That means owners should review their calendars for nights that aren’t earning money — then make it easier for travelers to book them.
One common mistake, Savage said, is setting overly restrictive minimum-stay requirements. An owner may require a four-night booking for a high-demand summer period because they want to avoid short stays and maximize revenue, but that can also keep the listing from appearing in searches by guests who want a two-night trip.
Instead of blocking those shorter stays entirely, Savage suggests giving guests the option to book them at a higher rate while offering discounts to travelers who book longer visits.
The same thinking applies to cancellation policies. A strict policy may seem like a way to protect a property owner from last-minute cancellations, but it can also discourage potential guests looking for flexibility.
“Removing as many restrictions as possible” can increase a listing’s visibility, Savage said. Owners can then use pricing and discounts to encourage the booking behavior they want.
3. Don’t try to appeal to everyone
For Savage, one of the biggest shifts in short-term rentals is the move toward more personalized search results. Instead of asking how to get a listing onto the first page for every traveler, he thinks owners should ask: “Who am I going to show up on page one for?”
Courtesy of Mike Savage
Airbnb can use a guest’s search and booking history, past reviews, and stated preferences to surface homes that fit their needs. A traveler who has previously highlighted family-friendly features, for example, may be more likely to see listings that clearly promote a fenced backyard, a quiet cul-de-sac, or a pack ‘n play.
That makes specificity more valuable than trying to create a generic home that appeals to everyone.
“It’s counterintuitive. We just want as many people as possible to want to book our home,” he said, but a property designed around a distinct guest profile — such as families with young children, remote workers, or pet owners — can draw guests willing to pay more and leave stronger reviews because the home met their particular needs.
“We don’t need everybody to want to book our home,” he said. “We just need a specific avatar that we can speak to better than everybody else — and that’s how we win the game.”
