Latest / Short Term Rental Problems and Solutions / Unreported Guest Damages? What Strategy Works when Cleaners are Irresponsible.

Transcript

Unreported Guest Damages? What Strategy Works when Cleaners are Irresponsible. · Short Term Rental Problems and Solutions

• Jeremiah Noll: Admit it, you expected your guests to act like you. You expected cleaners to be professional, contractors to be honest, and now you've realized it's not all sunshine and five-star reviews. That means you're in the right place. Today, we're answering an email about guest damage and how Lindsay is discovering it a little too late. Then we will discuss some strategies to keep this from happening again. And you'll hear me rant a little bit about some bad property managers too. That's because this is the community where we talk about the gross, awkward, and the operational messes, as well as the real strategies that help you keep going instead of quitting. Because you are not a quitter, and this industry is somewhere where you can win. Welcome to STR Problems Strong Solutions. Let's get into today's question. Hey Jeremiah, weird issue here. My cleaner is supposed to tell me when there's damage at the house so I can have it taken care of. But the last two times I was there, I noticed damage due to the renters that she didn't tell me about. How do I get them to tell me? The damage in question is broken ladder for a bunk bed, TP holder falling off the wall, nonstick frying pan deeply scratched. Blessings, Lindsey. So know how ⁓ this could be. And it's not just about, a $10 frying pan or, a $50 ladder. This is ⁓ really more about your guests and their disappointment. It's about reviews, it's about potentially dangerous, something potentially risky. ⁓ ⁓ go through this stuff all the time. ⁓ me, as an owner for a cleaning service, I am constantly hiring because we're constantly firing. It's a difficult situation to be in, especially in self-management. So ⁓ items you mentioned are not ⁓ actually expensive, that's not always the case. sometimes they don't notice that there's a cracked tile. that cracked tile might mean that water gets in there, the wood below it, like the subfloor gets rotted, ⁓ and all of things can happen, especially if this goes on for a while. There's also high situations like icy walkways. So it's not uncommon, but your guests aren't expecting there to be dangerous conditions on your A lot of them are coming from warmer areas and they end up coming up here for skiing and that's its own problem actually. it also be like something simple like that bunk that you mentioned. If a railing for that bunk bed is loose and nobody notices, somebody could fall the bed and because it was loose or broken or cracked, this is something that you should be aware of. Obviously, we're in agreement on that. ⁓ And want to make sure the rest of our listeners like, this is kind of high stakes. It's kind of a big deal. And not all take that seriously. And so we are sometimes talking about cracked or, you know, like a deck spindle might be broken, but that's actually a really big deal if it's on a balcony that's three floors high. And if that spindle is broken, then maybe a child could fall out or the dog might fall off of it. ⁓ There could be all kinds of things, but need the people who are in your team on site ⁓ to be doing these kinds of inspections, to looking for these types of things. And it's the kind of thing that you might see. other thing flags constantly is missing items. the cleaners are the most familiar with the house. But sometimes you get like a service where there's different people in your house all the time. So obviously pros and cons all situations, but ⁓ they should have photos of the that they can reference back to. Like photos of the cabinets, photos of the drawers, the silverware, whatever else. pro tip that I've seen a short-term owner do ⁓ labeling the shelves. So, this shelf will say like eight large plates, this shelf will say eight small plates, eight bowls, ⁓ so on so forth. ⁓ This gives renters the impression that you're well organized and if they break something, it's gonna be noticed. Not having it really that big of a deal in my opinion, but I think it's not bad to have. I think it's actually a good thing to have. identifying like how many spoons, how many forks, whatever, So you should be able to trust that your cleaner will be detailed enough to see and report these issues promptly. all cleaners care this stuff. And honestly, ⁓ you a lot of them are just trying to rush through your home and finish before ⁓ it's before ⁓ it's late. They're rushing through your home because they have other places to clean. They've got a lot of commitments that they have to fulfill. And honestly, the they clean, the more money they make you should be able to trust that your cleaner will be detailed enough to see and report these issues promptly. And if there's things that are missing, it's sometimes difficult to know what's missing in a photo. They use that kind of test when they're testing for IQ. In fact, when they were testing for IQ and they showed some kids a series of homes and they said, what's missing here? And the home without the chimney, it was how quickly they could identify that there was no chimney on the house. I'm getting way off topic. When we're talking about your cleaner, things that are missing, best for to compare it to a space where there is one. So have a of everything in the drawer. Everything's currently in this room and the reality, though what's in front of them, they can All these things should be ⁓ resources that are available to them, like in their cleaning or something. Confrontation is and should be healthy in all relationships. Also, human nature does not do well without accountability. They need to be accountable to somebody. There should be inspections going on, things like that. the way you handle the lack of attention to detail, ⁓ them telling you about these issues, ⁓ is to depend on the type of cleaner that you have. So in my experience, there's three different types. There's private individuals where it's like, Joe is my cleaner ⁓ and he's one who's gonna be cleaning my house no matter what. It's always Joe. There's pros and cons to that, but that's one business right? The second one ⁓ is individuals with few helpers. So here, Joe, just now he's got few customers and he can't really keep up. So he asks his brother and he asks his sister. ⁓ to start cleaning with him. now Joe has two helpers. So that's what I'm calling an individual with a few helpers. The third type is a full service cleaning so if you are getting these issues and you're dealing with property manager, then your property is not really managing your property. They're just renting it out. as much as they possibly can. So I get really annoyed by people who call themselves property managers that are not actually managing property. They might be managing your bookings, your calendar, doing revenue management, ⁓ they have a value that they offer. But it's certainly not responsibility or being on site or solving problems. ⁓ get so frustrated by just a ton of property managers that have zero intention of ever visiting your property personally. and they'll come and see it the first time. of them are just really not detailed either. ⁓ they're looking through your house very briefly saying, ⁓ this is pretty, that's nice. ⁓ cool. They don't know anything about water heaters. They don't know anything about breakers. They don't know about circuit. Like they don't know where to look for the panel. And how are they going to troubleshoot with a guest if they don't even know where the panel is in the house? ⁓ turn that breaker off, turn it back on. Like this is so annoying to me. ⁓ that they're constantly calling in service providers to do something that they should be aware of how to do. Perfect example. I was after a client talking them about bringing us on for management. And one of their complaints was that they needed issue in floor repaired And instead of identifying what the issue was and going out to get a couple of quotes, they actually charged the homeowner for a consultation. Somebody came out and did a consultation for the floor. I don't know what it was. It was like $250 to tell them what needs to be done and how much it should cost. And then they used that information to go out to a couple of flooring services in order to get those quotes. Why? Why do you not know as a property manager, why do you not know enough about a house and its systems in order to know what the issue is and how to fix it? Even if you don't fix it yourself. the photos ⁓ they should have able to diagnose, troubleshoot and fix that problem way easier. They didn't to charge somebody $250 for a consultation ⁓ with a flooring expert wasn't even a service provider. So like there's the little things that your property manager should be able to do. And there's things that you can't really expect them to do. ⁓ And that all should out while you're interviewing them. But, ⁓ my goodness. know of a property manager, good guy, gets a lot of business out here and visits the Poconos ⁓ five a week. It's constant. He's always but he's almost never inspecting his homes. I know ⁓ because I've some of these places and they're in terrible shape, like ⁓ really rough, all over the walls, issues with flooring. found mouse poop ⁓ in the drawer underneath oven. all kinds of issues and his cleaners aren't doing a very good job. when I walked into the home, I noticed salt all over the floor because they were mopping with a dirty bucket of water. There was so much salt on the floor that they mopped salt all over the floor. And now there's salt all over the floor and they walked out of the house and left it that way. Like there's just so many heaters left at 87 degrees once the cleaners leave because the property manager's not inspecting these homes. They're not looking at them. It's just so frustrating. so that's why as property manager, I'm not trying to get your business. I'm just telling you, ⁓ do inspections after every clean. ⁓ ⁓ to be in that house. I want to be managing the property, ⁓ just the renters coming in and out, ⁓ this makes for happier guests. This makes for happier homeowners. ⁓ means that there's opportunity for savings. Cause if I get there and I find out it's too warm in the house, gosh, turn down the thermostat, fix that problem. That's an opportunity now for me to retrain the cleaners on where to leave the thermostats when they leave the house. The other thing, and it's not their fault, ⁓ it's the people who hire them. Hiring a property manager that is a cleaner first. They're just a cleaner. And they tell you that they're a property manager. That's also probably a big red flag. It's probably a big problem too. So you gotta think through their systems, who they're using to message the guests when they're cleaning. There's a lot of logistics to that. choosing a property manager, I could do a whole episode on, I don't really need to get into it all right now. But the last thing I wanna leave you with in this little rant is property managers that live in like Florida and manage property in the Smokies or manage property in the Poconos or manage property in Vermont. they are a, an entire plane ride away from the house and solving the problems. and they might tell you, I've got an operations manager over there. Well, I should be interviewing manager, not you via Zoom. I should be actually interviewing the people who are gonna walk through my home. I wanna make they know me, that they care about me and my property, that they care about the guests. I want a connection. I wanna know that they're not just gonna ⁓ optimize my revenue you heard of somebody who buys a diner and waters down the chowder, like it might be the thing that had your guests coming over and over and over again, that somebody's trying to make more money and they slim down the margins that don't affect them and then the business drops off. So like there's a value in undercharging your guests for your stay and your property manager wants to charge your guests as much as possible. And you have to think about, do they actually care about four star reviews? Does it hurt them the way it hurts you to know that your property is being disrespected? My point is, if you're gonna hire a property manager, that it's in the contract they will personally walk through your property at least one time per month. I think it's a disservice to you, a disservice to your property, to not have that as a requirement. Because property managers, generally speaking, are incentivized by the amount of money that they make and the obligations they have to make that money. So if their obligation is to visit your property in person, or another representative, it has to say not the cleaner, it has to say them. Like they actually have to visit their property. Now, if you have a property manager who's not willing to agree to this, then I think that you as a homeowner should be doing these inspections yourself. I think that you should be doing this walkthrough yourself at least once a month. That way you can hold your property manager accountable. Additionally, look through your contract, make sure that property manager is accountable. Because if damage like this happens and their team doesn't report it, then They should be sticking their hand in their wallet to fork out the money for it, because if they are actually responsible for it, they should be covering it. And once they actually care because it hits their bottom line, just like it hits your bottom line, then they'll be a little bit more... what's the word? Conscious of these types of issues, ⁓ and maybe bring up so many excuses. well it'll probably increase their excuses. Let's be honest. Also, somebody call in or email in, ask about Evolve. I'd love to talk about them and Vacasa too. But anyway, let's get into these three types of cleaners and what you do based on the dynamic and a couple of things to know about them ⁓ before you ⁓ try implement a which I think is really the best solution for this. So the most common type are the private individual cleaners. This is when Joe comes to your house, he works a full-time job at the school district maybe as a custodian, but then he comes to your house everyday usually like two o'clock, 3.30 when he leaves the school, he comes to your house, cleans it, and now it's ready for the next guest. Now there's problems with this, like you can't accommodate a five hour turn. because the guy has a full-time job he's not gonna give up on. Or ⁓ you might just have somebody who's a professional cleaner and this is all they do. Maybe they're retired, maybe they have social security. There could be a lot of different reasons why this is their full-time gig and they're always available. this the most common type. Make sure you're getting good photos after every single clean. The photos should show everything. The supply closet, it should show inside the cabinets, inside the oven, the refrigerator, everything. Everything should be done, new photos every single time without question. You can and should implement a checklist of photos and tasks. Have them test the hot water and the cold water. They don't always test that the hot water is working when they're cleaning the house. Sometimes they don't want to wait for it to turn hot. They just want to wash the sink with whatever's coming out, rinse it out, and then they're done with it. They might not notice that the water heater's not working. Second thing is they could test those steps. If it's on a They're going to notice that it's broken because if it's on their checklist to test then they're going to tell you, hey, this is broken, it's not right. So now you ⁓ don't get as much damage that becomes unreported by having a checklist like this. thing think about, the things that you don't see. So they can put a half full glass of water in the microwave, put it on for a minute, come back to it, make sure that the water's warm. Now we know the microwave works. Doing this every single time doesn't take a whole lot of time. It's not expensive. It's relatively simple. It's just clean water too. They can pour it back out in the sink, put it back on the shelf. Simple, easy, and it's a good way to test things that are actually working. The systems are actually working for your guests before they arrive. So you're going to implement a checklist like this that you're not already doing, make sure that you have the willingness to pay extra for it. Ask your cleaner, what do you think this is worth? Is it an extra $10 per clean? Is it an extra $20 per clean? And only pay that extra when you get the checklist. If for some reason they say, hey, I was really busy today, I didn't do the checklist, I didn't send it to you, but I'll do it next time. Just say, okay, well, I guess it's gonna be, you know, $170 this time, right? Oh, okay. So. Just make sure that you've got that sort of thing like itemized like this is this is something that they're doing for a cost and it's not exactly just the clean but it's associated with the clean ⁓ in your mind it's required but You know humans they come up with excuses all the time ⁓ cleaners are typically pretty busy. ⁓ the other thing is to make sure that your cleaner knows that you like them and trust them Frame it as this is us against the guests. We try our best to make them happy, but nobody's perfect. But this is an effort to make them happy. This is like making sure that the coffee maker works and that the microwave is working and that nothing is broken for the next guest. So just focus yourselves so that you're in the same team on guest satisfaction on Five Star Cleans. The next one, the next style, the next type of service is the individual with a few helpers. These cleaners are hustlers. They're working hard. They have customers that they don't want to disappoint. They oftentimes have very high opinions of themselves and they're constantly dealing with the disappointment of their helpers because the helpers are generally not as good as they are. So this is a cleaner, this is like Joe who decided, you know what, I've got so many houses. I don't need to be a custodian anymore. I can give up on that job and I can go full-time into cleaning. That'll enable me to pick up five more customers. I've already got five people who want me to clean for them. ⁓ that's the next progression for them. They give up on their job, they go full-time into cleaning. And then once they get too busy with that, they for people to help them. And that's usually something that they're asking for just as a part-time thing. But then they get into this phase where it's a cleaner with a few helpers, where they're constantly using helpers. So this is now like, Joe is sending his sister, over to your house to clean it, ⁓ he tells her, this is what to do, this is when to do it, this is how it has to get done, ⁓ gonna be around the corner, call me if there's a problem. That's usually the dynamic. ⁓ a personal relationship that they have with somebody else. Now downside to this, oftentimes Joe paying Patty, or Sally, I forget what name I used, ⁓ he's paying under the table. ⁓ And... ⁓ That's a problem for a number of reasons. So one is Joe is now paying taxes at whatever tax bracket he lands on, on the money he's paying to Sally. So if Sally's getting, I don't know, 150 bucks for this, the taxes should be taken out. FICO should be taken out on both sides, because it's self-employment income. And for Pennsylvania is 3%, but then for the federal, there's another one. So now if Sally's total income ends up being below Joe's, anyway, I don't really need to get into the taxes of it. Just understand that there's a differential. And so you should be paying people above table, like legitimate paying them, because if they're not legitimate 1099 workers, then they're actually considered employees, even if you don't take out taxes, even if you have them sign off on something that says, I'm a 1099 independent contractor. If you treat them as an employee, if you train them, if you provide them tools that they need to do the job, then you're liable for a workman's comp issue. Like if they slip and fall your stairs, ⁓ or if hit their head while they're making a bed, or like what happened me? somebody's throwing away trash in a dumpster and they slip and fall and break wrist. Now they're out of work for the next eight months going through reconstructive surgeries and physical therapy at your expense. Those bills add up quite a bit. And even though they said they were 1099, because they were being treated as an employee in some way, they're able to get all of their medical bills covered by your insurance. And if your insurance is not willing to cover them because you didn't have them down as an employee, but rather as a 1099 worker, good luck with that. because they don't want to go bankrupt, they're going to go to you, and you apparently have the big money. So I'm just telling you, make sure you've got your situation in order. the with helpers, like that kind of cleaning service, make sure they've their business situation in order or recognize the risk that you're running by hiring them. Now this is their tax problem. Make sure though that give you a W-9 so that you can issue them a 1099 at the end of the year. because otherwise you're paying taxes at your highest tax bracket on all the money that you gave to them. Now I know it's it's rental income. So your tax bracket on a long-term investment is probably like five or 15%, whatever. I'm not getting into that so much. I'm not a tax guy. For that you wanna call Mason Kimball. I hope you're listening. But yeah, so for that, you need to contact an actual CPA, somebody who knows a little bit more about it than I do. I just had a minor in college, you know, in accounting. So that was 2008, I took the classes and tax codes change over time. I'm getting way off topic, I'm sorry for that. So when you're dealing with individuals with helpers, a cleaner with helpers, logistics is a weakness since they usually end up doing it all themselves. Like I said, if Joe is around the corner from Sally and Sally says, hey, the hot tub is like green, I don't know what to do about this. Now Joe's got to finish the house that he's at faster so he can get over there. But now there's not enough time to empty it and refill it. So logistically, he's only one person, right? But he's got to solve these problems. So now that impacts your guests, it impacts their guest satisfaction because now the hot tub is being refilled when they're supposed to be checking in. And it's just because he doesn't have systems, he doesn't have people to problems for him. It's just a small business, right? It's just a small enterprise. They don't really have a whole lot of capacity. The thing that happens is maybe you've got an issue with like a well line that froze ⁓ and waiting to get that restored. And now it's restored. It's a Friday. Hey Joe, can you come over and clean my house? I have a guest who wants to check in today. Well, that's now a problem. Now, Joe doesn't have the capacity to deploy a resource over to your property to take care of that clean. They didn't clean it before because there wasn't any water. also weren't expecting for you to get a guest checking in on Friday because there wasn't anything scheduled yet and there was no water. Now that it's restored, you want to make that money. ⁓ do you do? You're relying on a cleaner that doesn't have the capacity to solve your problem. They probably have other things on their schedule. So a reason have other cleaners as well, the more people that you can call for this, the better, but in some ways, the more people that you have cleaning your house, the worse, because now they're not all willing to do the checklist. You don't have the same consistency. ⁓ Some them make beds by tucking. Some of them don't make beds by tucking. And if your guests get there and it doesn't look like the photos, ⁓ they're be disappointed. The more disappointed they are, well, the higher your risk goes of a bigger problem. ⁓ So anyway, to do with a cleaning service like this is, To get them to notice this type of damage, you need to implement a checklist. The same checklist that we were talking about before, but in this case, offer extra pay per inspection and make sure that it's being done by Joe, personally. That it's by the cleaning service leader, the owner of the business. ⁓ one who's out there in the trenches actually cleaning. Make sure they're the ones doing the inspection. ⁓ if they have like another manager, like have that person responsible for this. have a relationship with whoever's doing the inspections. make it happens by FaceTime or with a video with them talking. ⁓ That way know this is the person doing the inspection. It's not really worthwhile ⁓ if they're Sally to do the inspection. Remember, asking your kids to grade their own homework is, they don't what they don't know. They don't know what they missed. So why would you ask your cleaners to do their own inspections? So, ⁓ you've got to have the one that you know, like, and trust the best cleaner doing their inspection, their own inspection of the house, the systems, things like that. So that whole checklist that I'm talking about, level of help. It's to help solve these problems and it's gonna help identify the issues before they become real issues, ⁓ but it's not a foolproof plan, right? So the third style a service cleaning business. So this is where most property managers go, because most managers wanna have like a couple of service providers, that way they only have to manage a couple of relationships. They don't wanna have like 15 separate cleaners. Sometimes they do. Usually it's a cleaning service. I don't do that. I have built my own cleaning service because I couldn't find anybody to focus on quality the way I do. A full cleaning service is good, but some of the relationship dynamic is lost. Another thing that you've got to think about is the logistics of consistency. So having photos available to those cleaners that are actually cleaning the house, so they know how this is supposed to be set up, how that is supposed to be made, all these different types of things you can do to support your cleaning service. But do not implement these things midway because they're going to start thinking that you don't trust them, They're probably going to keep doing it, but nevertheless, ⁓ it's to implement these things like halfway through your with them. It's much easier to do it on the front end, get them when they want the business to agree to all these different things, ⁓ or ⁓ make sure have contract. I think all professional services should have an actual contract, not just like a handshake agreement, not just a text message thread, maybe an email. Okay, but you actually have a real contract. on. So them It's a cleaning service. Yes, they might be big, but they do have a face. ⁓ Ask I cannot make a claim on the platform, are you gonna take care of the damage? So if there is a broken tile or a missing ball from the pool table, are going to make it right? they gonna get another set balls for the pool table? Or are they going pay for the repair for this tile? Because if they missed something, that's in their contract that they're not supposed to miss and they don't report this damage. Now you can't make a claim against the guest and Airbnb and AirCover can't cover it. So if it's the cleaning services problem, they should be willing to solve the problem. It might be in their contract, look for this, that the maximum refund is the of the service. That's also quite common. ⁓ In situation, you're not actually asking for a refund. You're asking for a credit to future cleans ⁓ of the expense was. And a lot of them, I think, would be willing to do But you've got to figure that out and find a way to hold them accountable. Worst case scenario, shop around in the slow season. In shoulder seasons where, like for it's the spring. For a lot of people, it's the summertime. ⁓ Sorry, it's wintertime or the summertime, ⁓ whatever. In shoulder season, those cleaning services are looking for more cleans. They're looking to do deep cleans. They're looking for ⁓ more customers they think ⁓ they can more customers, that's the time to shop around, to ask for another cleaner or not just a quote. Don't ask, just ask for a quote. Actually speak with them, get a feel for their systems. How do they do quality control? Will they implement your checklist? Are they gonna have different people going into your house every single time? So on and so forth. The last tip barely anybody thinks about is to advertise for your cleaning service or like hint to the guests ⁓ how to offer possibly even add them as a co-host to your listing. So these ideas, they work for three reasons. In a cleaning service, individual cleaners are getting paid hourly or they're getting a portion of the cleaning fee. So an extra $10 like tip makes a big difference for them. The second thing is it produces a feeling of pride and it's hard to quantify the cost or the value of somebody putting into their work. Like you think that they always do this, but sometimes people are hungover, sometimes people are late for work, sometimes they have to leave early to pick up their kids. ⁓ could be a million things going on in their lives that cause them to, ⁓ know, take a little bit less pride in the job that they're doing. ⁓ ⁓ you want to do is like, I don't know, Sparkle Suds, maybe it's the cleaning service. make sure that you've got a little sign somewhere, usually in the kitchen, that says like Sparkle Suds cleans this home. That way they take a little bit of pride and it's their name now that's on the line. Because if the guest feels like Sparkle Suds didn't do a very good job, this could actually lead to Sparkle Suds getting a review on Google or Yelp or whatever else. Or they might even mention it ⁓ Airbnb in their review. Sparkle Suds didn't do a very good job because like the beds had hair on them and there was dust all over the the countertops and I found that the pots and pans were still dirty or you know, whatever that sort of thing give them something that be proud of, you know by putting a name To the job by putting their name on your house The one is the tips like tip might make a huge difference So allowing them to put a little envelope out that says like here, if you wanna leave a tip, this is how you do it. Putting that sort of thing into your welcome message or your checkout message, you just tell them if you wanna leave the cleaners a tip, here's how to do it. Like leave it on a plate or whatever. not standard. But do see it in some houses where the cleaners leave little envelopes that they're hoping that somebody's gonna leave a five or a 10 or a 20 in, right? ⁓ And allowing them to do that sort thing gives them an incentive to do an extra good job at your house wouldn't be there otherwise. Now, some hosts think it's tacky, make your own decision. But in this situation, that's something that doesn't cost you any money. And it's not asking your guests to leave them a tip. ⁓ It's something that you can manage, right? So doing something like that makes a big difference. ⁓ The I think makes a big difference. ⁓ Giving just a platform to advertise with. I think also makes a big difference. So, and you really want them to go that extra mile. Now, if today's episode felt a little bit too familiar, you're not alone. These are the problems no one talks about when they sell the dream of easy passive income. If you've got a situation you want to share, then please email your question, info@ galvanizedmanagement.com or reach out and talk. If you'd willing to coming into the show, I can share my screen with you. It'd be great. I'd really like that. back and forth kind of interaction to come. Your problem might be the next one that we break down, and chances are you'll help a lot of other hosts in the process too. If this episode you, share it with another host who's in the trenches. That's how we make the industry better. I'd also love to see you follow us on TikTok at Galvanized Investments, Facebook and YouTube at Galvanized Management, and lastly, jeremiahnoll.com. Until next time, stay steady, keep learning and keep building something real. This is STR Problems, Strong Solutions.