In the vacation rental market, VRBO is short for Vacation Rentals by Owner. In today’s era, travel agencies are no longer the only source for booking quality vacations. Most vacation condominiums are privately owned, which means that each gate at a Beach Resort is owned by a separate person or entity. Before the internet came along, property owners relied on travel agencies or real estate companies to fill these rental properties with vacationers. Owners and travelers alike needed a direct means of doing business. The Internet now makes it possible for property owners to be contacted directly by the potential user of the property, thus cutting out the “middle man” and resulting in mutual benefit for both parties. However, this method of booking vacation or business accommodation is not without risk; but if one is willing to take the risk, it could result in huge savings.
Two decades ago, if you wanted to book a nice 2-bedroom vacation condo on the beach, you would have needed to get out of the yellow pages and call a travel agent, who would in turn contact or put you in touch with a realtor. company that managed that exact type of property. The package was booked and paid for through the travel agent, who would get a predetermined percentage of the cost of the package. The resort’s management firm, which is almost always a real estate company, would also get a large percentage of the profits. This association allowed these companies to maintain control of the vacation rental market for years, and precisely how the large management companies found today were able to grow into the mega-corporations that they are.
As the Internet became more widely available, websites began to appear that allowed the owner to advertise their property for weekly rentals. These sites are very popular with regular tourists and are growing more and more each year. Most property owners using these listing sites have chosen to discontinue contracts with property managers in an effort to save on management fees. This is a very important factor to consider when reserving a property from a VRBO site. By the time he arrives, all negotiations will be over; and if the property is not what you expected it to be, there will not be a front desk or management number to call for fines. Your only source of contact is likely to be the property owner, who may live hundreds or thousands of miles from the actual condo you reserved. This is the bet that needs to be considered when reserving an unmanaged property from a VRBO site.
Trust is key between both parties. The landlord trusts that his property will be properly cared for, and the tenant trusts that a good property will be there upon his arrival. Assuming the property is exactly as advertised, and all amenities and utilities work as they should, this deal could be a great opportunity for both parties. Eliminating the “middle man” will generally result in lower rental rates, while also generating a higher profit for the landlord.