4 Smart Home Products That Made Our Airbnb Party-Friendly

Our vacation rental business began as a romantic dream of my husband’s, a way to invest our savings in something other than the stock market. We had never owned a home before — we lived in a two-bedroom apartment in San Francisco — but we were incredibly optimistic about our ability to turn this into a lucrative side income that we could also enjoy occasionally.

Six years and three rental properties later, that dream has grown into a real business for us. But it certainly didn’t happen overnight and we made a lot of rookie mistakes that cost us time and money when we first started.

Below are three scenarios we encountered and how we are now using technology to manage our investments remotely.

Not making our place party-proof

This mistake could easily have meant the end of our little hobby of renting out holiday homes, due to our neighbourhood’s policy on dropping out after two visits.

Our first rental property is located in PGA West, a gated community near Palm Springs known for its world-class golf courses and resort-like grounds, making it a highly desirable place for retirees to live. Since many of our neighbors live there full-time, anyone running a vacation home like ours is already heavily monitored, and it’s important that our renters are respectful and abide by the community’s quiet hours.

During our first year in business, a neighbor called security on one of our guests for playing loud music late into the night. The next morning, the guest assured us that he had not even been outside the night before, let alone played music. It became a he-said-she-said situation with no real resolution other than the fact that we were now one “warning” away from losing our short-term rental license and potentially having to sell our investment property.

To prevent this from happening again, we have a Minute noise monitor for our back patio. Unlike a baby monitor that lets you listen in on everything going on in the room, the Minut only alerts you if the sound exceeds a certain decibel level. This allows us to preempt any complaints from neighbors by contacting the guest directly to turn the volume down, and gives us a tangible data point to argue our case in the event we receive another alert.

We also had a case at our other property, in Coachella, where the tenant decided to throw an impromptu party without us notifying him, and then denied the entire event, despite us having a Ring doorbell that had documented the onslaught of guests arriving at the door throughout the night. The irrefutable evidence allowed us to report the case to Airbnb and get compensation for the damages that occurred during that wild night.

Related: Airbnb bans indoor security cameras in rental properties

Giving tenants free rein with thermostats

This may seem obvious, but when we first started, we lived in a naive apartment. Utilities were included in the rent. Also, I had only heard of smart thermostats because I used to work at CNET.

Our very first guests left the A/C on at a cool 65 degrees (mid-August) and we didn’t find out until two weeks later when the cleaners preparing the space for the next guests walked into an ice room. The shock of our first electric bill forced us to get “smarter” about our A/C policies and replace the dumb thermostats with two Nest Thermostats.

With Nest, we can control the thermostat remotely and set it on a schedule so that even if a guest manually adjusts it, it will return to our preset range at certain times of the day. We also have a set of energy usage rules in our lease that prevent guests from unnecessarily cooling the place to arctic levels.

We took the same approach with the pool and hot tub, which Pentair heaters that can be controlled remotely with the Pentair app. And unlike the Nest thermostats, these heaters are not directly accessible for guests to manually control, so guests must request temperature changes for the pool and spa from the host.

Forgot to adjust our prices

Aside from party-proofing, the most expensive mistake we made was not adjusting our prices regularly. Starting out without reviews on Airbnb, Vrbo or another rental platform can be tough, even for the most impressive properties, so we had to set our rental price much lower than our competitors to make it more attractive.

As our listing gained traction, people started to casually book future dates that we had made available on the calendar for the same introductory rates we had started with. By the time we raised our rates, one guest had already booked the week of Thanksgiving for less than a quarter of what we were expecting for those dates. We tried to cancel and adjust the prices, but Airbnb penalizes hosts for canceling reservations; if you cancel a booked reservation, you have to pay a percentage of the booking and Airbnb blocks those dates on your calendar so that no one else can book at a new rate.

That experience has forced us to reevaluate our pricing regularly a full year in advance, taking into account the season, holidays, and major events that can increase demand. At our Palm Springs location, the two weeks of Coachella music festival alone can generate enough revenue to cover half of our operating costs for the year. This helps offset the slow months of summer, when nighttime temperatures can be in the triple digits and the venue can sit empty for weeks at a time.

We have automated many of the daily pricing decisions using Pasta revenue management platform that uses algorithms to optimize nightly rates across all your vacation rental platforms. The program takes 1% of each booking and still requires a bit of oversight on our part, but with three properties and our regular full-time jobs to look after, it’s been a worthy investment.

Perhaps the biggest lesson we’ve learned about vacation rentals is that while they can be a significant source of income, they are by no means passive income. Even with experience and all the smart home gadgets and automation programs that money can buy, you still have to run them like a business if you want to make money. And you have to get at least some level of enjoyment out of it. Otherwise, you’re better off betting on the stock market.