Glossary of Terms
A
Advance Payment: Advance payments are applied to the total rental cost and are paid by the renter to the owner. The amount usually equals a portion of the total rental amount.
Advertised Price: The price per night that a rental manager or channel is showing to the customer.
Alternative Agreement: Another type of agreement where vacation rental managers provide homeowners with a guaranteed rental. Under these arrangements, rental managers can buy all of the weeks the homeowner wishes to rent in a single transaction so that they are guaranteed income.
Amenity Fee: A certain amount paid to an owner or property complex that is above and beyond the specified rental rate in order to allow the renter access to certain amenities such as golf, tennis, beach chairs, etc.
American Society of Home Inspectors (ASHI): The oldest, largest, and most respected professional organization for the education and certification of home inspectors.
Availability, Rates & Inventory (ARI): The minimum amount of information that a vacation rental manager needs to give to a channel to list the property.
Available Nights: The total number of nights that a rental manager can rent out a property – oftentimes the owner will want to keep a few days per year in the property for themselves!
Average Daily Rate (ADR): The average rate of a property per night over a certain time period. This is calculated by dividing the total rental revenue by the total number of nights that are sold for the property.
Average Length of Stay (ALOS): The average number of nights that a customer stays in the rental over a certain time period (a month, a season, or a year for example.)
Average Rate Index (ARI): A measurement of success (Key Performance Indicator, or KPI) that shows the rental property’s average daily rate over a certain time period compared to a set of competitive numbers.
B
Bartered Services: The act of exchanging a stay at your vacation property for repairs, maintenance, or other work that may need to be completed.
Best Available Rate: The lowest-possible rate that can be found for the property.
Best Rate Guarantee: The promise that whatever rate the customer books at is the lowest-possible rate that can be found anywhere.
Billboard Effect: The theory that the more channels a vacation rental is listed on (like on Paradise Getaways), the more exposure the property will gain and the more bookings will be made.
Booking Curve: A tool that shows the number of bookings over a certain amount of time, which helps property owners and managers to adjust rates and availability.
Booking Engine: An online application or website that helps customers to book a rental property – like Paradise Getaways and our partner websites!
Booking Pace: The rate at which a rental property is being booked over a certain amount of time.
Broom Clean: Used in the real estate industry as a way to describe the cleanliness of a home. To “broom clean” a home also means to take out the trash, to remove personal items, and to sweep the floors, though broom cleaning generally does not involve sanitization.
C
Channel Fee: A commission that a third-party distributor charges for a vacation rental to be listed on the website.
Channel Manager: A company that serves as a connector between a third-party distributor and the vacation rental manager in order to keep the property’s prices and details in sync across all channels.
Cleaning Fee: A certain amount of money that is above and beyond the rental rate that renters are charged in order to cover the cost of cleaning the property after their departure.
Cleaning management: hiring a cleaning crew and automating scheduling.
Closed To Arrival: A tool that makes certain days unavailable for arrivals.
Co-Host: a person that the host knows or hired to help manage the listing.
Competitive Set: Similar rental properties (they attract the same demographic, or are similar in style and price) that can be compared against one another to analyze performance.
Complex: A building or group of buildings with multiple units for rent, usually managed by a Home Owners Association or Vacation Rental Manager.
Condo-Hotel: A building with condos but with services like a hotel (concierge, room service, etc.) – sounds like the best of both worlds!
Contract: the rental agreement between the host and guest.
Conversion Rate: The number of people viewing a property online or making an inquiry who decide to actually book it.
Cosmetic Upgrades: Improvements made to a home– such as installing a new fireplace or better carpeting– that are relatively inexpensive but can make a huge difference to the look and feel of the home.
Custom Fees: Any add-on fee that is unique to the property. For example, a cleaning fee is pretty normal, but you won’t see a hot tub cleaning fee everywhere.
D
Damage Waiver Fee: A fee that some owners collect in lieu of a damage deposit. Usually, damage waivers are significantly less than damage deposits—usually just $25-$100 depending on the property. Also, unlike a damage deposit, the damage waiver is nonrefundable.
Deeded Access: A written and filed right to have complete access to a certain property.
Deposit: An amount of money collected from the guest to cover the cost of any damages to the property. This money is refunded once the guest leaves your property in good condition. serve as a refundable deposit in the event of guest damage to the property.
Depth of Inventory: The number of similar units that are available to rent in a specific area. These can be broken into Key Level channels (where the unit is described in more detail.)
Direct Booking: When a customer books directly with the rental manager, rather than a third-party distribution channel.
Double booking: When a property is accidentally booked by separate guests for the same nights. This can happen when properties are not synced across channels.
Dynamic pricing: Changing a property’s nightly pricing to match demand. For example, a property may become more expensive per night if there is a popular event in the area bringing in more tourists than usual. Or, lowering prices for low-season.
E
Equity: A homeowner’s financial interest in a property. Equity is the difference between the fair market value of the property and the amount that is still owed on its mortgage.
Eviction: The lawful expulsion of an occupant from any property.
Exit Strategies: A predetermined plan that takes into account everybody’s interest in a joint ownership arrangement.
F
Fair Housing Act: Federal statute prohibiting discrimination against renters based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).
Fair Market Value (FMV): An estimate of the market value of the property that is based on what a knowledgeable, willing, and unpressured buyer would likely pay to a seller in the market. Basically, it is the highest price that a buyer would agree to pay and the lowest price that a seller would agree to accept in any transaction.
Fixed-Rate/Fixed-Term Mortgage: Interest and payments that do not change over the length of the loan.
FSBO (For Sale By Owner): When a homeowner chooses to sell a home by himself or herself rather than go through a listing agent or company.
G
Gîtes: Term that is used in the rural locations of France that specifies a type of holiday accommodation—i.e. a holiday home that is available for rent. Gîtes are usually fully furnished and equipped for self-catering. Plus, to be officially deemed a Gîte, the owner must live close by in order to provide help, assistance, and a warm welcome to guests who choose to stay. Renters handling their own rentals can choose to find these by searching online on the multitude of listing sites, or by checking with any local tourist information office.
Global Distribution System (GDS): A system that makes transactions between third-party services (like Paradise Getaways) and the rental manager possible.
Gross Booking Revenue: The total amount of money collected, including Guest Fees (see below!)
Guest Experience: an open-ended term derived from the hospitality industry. Generally, the guest experience begins at booking, through their stay, and communications they receive past check-out.
Guest Fees: Charges to a guest beyond the initial price, like cleaning fees, pet fees, and extra person fees.
Guest Screening: The steps that are taken to get to know potential renters before allowing them to rent any property.
H
HOA (Home Owners Association): The association that is responsible for the maintenance, upkeep, and financial management of common areas in certain complexes and neighborhoods.
Homeowner’s Insurance: An important type of property insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and the contents inside.
Holiday Lets: The term for holiday homes in the United Kingdom. When across the Pond, be sure to rent out a cute little holiday let!
Host Fees: a host fee is a percentage taken out of a booking from third-party sites that a rental is listed on. It is essentially a service charge. (Info on Vrbo and Airbnb host fees).
House manual: a step-by-step guide to the house. Items include wifi information, how to take out the trash, washer/dry usage, etc.
House rules: a set of rules determined by the host to let guests know what is and isn’t allowed on the property. The rules will explain the fines and actions taken if these rules are broken. Example: no parties or unregistered guests on the property.
I
iCal: the standard platform for sharing calendar information.
Inquiry: a message from a potential guest with questions about the property.
Installments: Breaking up payments that are made into equal installments is what many homeowners/renters choose to do when signing a rental agreement–it often makes things easier for both parties. Remember though, for last-minute reservations, full payments at the time of booking may be best.
Instant book: allows guests to book a property instantly rather than wait for host approval.
Internet Service Provider (ISP): A commercial service that sells access to the Internet to individuals.
K
Key Performance Indicators (KPI): Anyone who has a background in business will know what this means! KPIs for vacation rentals are numbers that are the most important to measure for determining how successful the rental is. Some of the numbers to keep in mind are Occupancy Rate, Average Daily Rate, and Conversion Rate.
Key-Level Listing: If a rental property is a building with several units, a key-level listing describes one of these units in more detail (i.e. “Malibu Ocean View Unit 216 is right by the elevator on the second floor and has a balcony and a panoramic view of the ocean.”)
Keyless entry: access to the property without the use of a physical key. A keypad or smart lock is generally used for self-check-in.
L
Length of Stay (LOS) pricing: a pricing strategy that encourages guests to book longer stays. Example: a 10% nightly discount for a 7-day stay.
Listing: the profile of the rental property. This generally includes photos, prices, availability, and location information.
Lock Boxes: Many rental properties today make popular use of electronic keyless locks, which are digital or push button mechanical lock boxes that do not require a key or access card to operate. These often allow for easier and more efficient entrance into the rental if ever needed by an agent and/or potential renters.
Long-term rental: stays that are longer than 30+ days. Usually rented by the month instead of the week or day.
Low season: the time of year where travel is less common in the area. Hosts generally lower their nightly rates to attract travelers that are in the area. Also known as off-peak season.
M
Managed Distribution: Any service that helps vacation rental managers improve the distribution of their property online. Examples of this are help with increasing revenue, adjusting the rates per night, payment and accounting help, and listing the property on more channels.
Merchant Channel: A distribution channel that charges the traveler’s credit card and sends the supplier a net rate—think Expedia, Orbitz, or Priceline.
Merchant Of Record: The company or party that charges the renter’s credit card for the booking.
Minimum Stays: A minimum stay period required by the property owner in order to rent out the home. During the busy months, at least one-week minimum stays may be typical, though options can often vary, especially in less crazy seasons. As such, minimum stay regulations usually reflect seasonality and what the competition is doing at the moment.
Multi-calendar: a single calendar that contains all the bookings of a listing across different channels. This avoids double-booking.
Multi-channel: Advertising and synching your property details across multiple platforms (i.e. Airbnb, vrbo, and Booking.com) so it is as exposed to as many guests as possible.
Medium-term rental: a property that rents over 30 days but less than 365 days.
N
Net Rate: The total amount that a property owner receives from a distribution channel (like VRBO or HomeAway, for example) after commission has been deducted.
Nigerian scam: A widespread scam in which renters (i.e. Scammers) demand for an immediate refund after the owners have deposited the check. In worse cases, Scammers may write a check for an amount greater than the balance owed and ask that owners immediately mail back the difference. Unfortunately, by the time the banks discover the counterfeit certified checks, it is too late to take any action because the owners have already sent out the refund amounts.
O
Occupancy Rate: The percentage of the time that a vacation rental is occupied out of the total nights available.
Off-peak Season: the time of year where travel is less common in the area. Hosts generally lower their nightly rates to attract travelers that are in the area. Also known as low-season.
Online Payment Service: Such as PayPal—these are fast and convenient web-based payment services that allow money to be transferred automatically over the Internet, or directly from their credit card and/or personal checking account.
Orphan days: a period when you just have a few empty nights in between bookings. With minimum night requirements, sometimes there may be a few days in between week-long bookings.
OTA Ranking: Where your rental shows up on a search results page. The closer to the top, the better!
Owner’s Closet: A locked closet that is set aside in the vacation rental property to store the owner’s personal things.
Owners Portal: for owners who outsource their property management, this portal serves as a dashboard for easy viewing of how your property is doing.
Owner Revenue: How much money the property owner receives after the vacation rental management system (VRM) takes the commission out of the total revenue.
P
Pet Fee and Deposit: A certain amount of money above and beyond the rental rate that covers the stay of any pet, as well as any special accommodations that may be made to cater towards the pet. Pet fees are nonrefundable. However, pet deposits can be refunded after the guests’ stay if no damage has incurred. Flat rate fees can also be used in lieu of a pet deposit.
Pet friendly: a property that accepts guests with pets for an additional fee.
PMS: the shorthand for the property management system. It’s software, like Host Tools, that synchronizes listing calendars.
Pre-approval: a way for hosts to let guests know a listing is available when guests send an inquiry.
Price per guest: a pricing rule based on the number of guests in the reservation.
Promotions: A bonus on a vacation rental (for example, “3rd night free when you book for a weekend in May!”) or a special discount.
Property: A vacation rental home.
Property Group: A group of vacation rental properties that are very similar. Rental managers will often price these properties together.
Property manager: a person hired by the host to manage the day-to-day tasks of the listing. Pricing Structures: A system of different rental rates for different rental seasons.
Q
Qualification: Otherwise known as pre-qualification. It is a verbal approximation with no guarantees from a loan officer that you will or will not qualify for a loan.
R
Rack Rate: The full price of the rental property per night, before discounts are applied.
Rate Parity: Maintaining the same rate per night for a vacation rental across all of the distribution channels.
Regulations: rules that are specific to the location of the listing. I.e: how many rental days per year is considered a short-term rental.
Repeat guests: guests who loved your property and have returned for another visit.
Representative Style Listing: A listing that represents a certain lodging type in a multi-unit building or complex. This listing might have “Depth of Inventory” and different unit types. Examples would include: “2BR/2BA Ocean View” properties, as well as “Hotel-style” listings by Type, Location, Arrival Time, etc.
Reservation Deposit: A certain amount of money collected upon booking that validates the rental contract. The reservation deposit can automatically convert into a damage deposit.
Return on Investment (ROI): A very important measurement of success! This is calculated by dividing the cost of the investment by the total revenue, or in the case of the vacation rental, the cost of the property by the amount made from the property. The bigger the better!
Reviews: a guest will leave public feedback on a listing for other potential guests to see when browsing listings. Hosts also have the opportunity to review guests. This keeps the short-term rental community safe and accountable.
Revenue Management: The use of analytics to track a vacation property (or group of properties) and how they are performing over time. This helps the owner or distribution channel to increase profit and growth.
Revenue Per Available Night: This amount is calculated by dividing the total amount of revenue from a vacation rental property by the number of available nights.
Revenue Per Available Room: This number, also known as RevPAR, is used in the hotel industry to determine performance. It is measured by dividing the total room revenue in a hotel by the room count and number of days in the measurement period.
Room type: the specific type of property a host is renting. Examples include renting a private room in a home, shared room, or an entire property.
S
Sales Tax: Many states in the U.S. and provinces in Canada require the collection and remittance of sales tax. Sales taxes are typically paid by guests in addition to the rental rates to the property owners, who then gather up the monies to hand over to the government at an interval (typically quarterly). Specific area requirements can be found by contacting various county sales tax offices.
Screening: a process used by hosts and channels to pre-check a guest’s background before approving a rental. Airbnb’s screening process includes verifying identity through a valid I.D.
Security Deposit: A certain amount of money that the owner holds until after the renters have left the property. Typical security/damage deposits are $200 or 10% of the rental rate.
Self-Catering Accommodations: Accommodations that usually include private or shared kitchen facilities where guests are able to make their own meals. These types of rentals can offer greater flexibility to many renters and are often a great option for those on a tighter budget, for large families with fussy eaters, or for travelers with special dietary needs.
Self-check-in: a check-in process where the guest can enter the unit on their own. This generally requires a keyless entry.
Short-term-rental: a property, generally rented for vacations, that is rented less than 30 days at a time.
Short-term rental insurance: Separate insurance from home insurance that specifically covers properties rented out as short-term rentals.
Smart lock: a WiFi or Bluetooth-enabled lock that allows for keyless entry.
Smart lock hub: a tool that links your smart locks to the internet. A hub will also let you automate your lock.
SNAD: Some travelers avoid vacation rentals for fear of what industry insiders call SNAD—i.e. “Significantly Not As Described”. These “scams” refer to properties that look like paradise in online photos but are in reality, dingy spaces boasting leaky roofs, blocked views, or worse upon the traveler’s arrival. To reduce risks like these, many vacation rental companies offer user reviews to provide further assurance.
T
Taxes: Taxable income earned from your short-term rental is taxable under Form 1040 unless the non-taxable rental exception applies.
Third-Party Distribution: Websites and companies that show information for a vacation rental. Examples of this include Paradise Getaways and Paradise Getaways’ partner sites.
Time-Sharing: Homes that are divided in ownership or use on the basis of time periods, most often one or two weeks each year. Basically it is a hybrid form of ownership, or the right to occupy a unit of real estate during a specified number of separate time periods. Time sharing often allows multiple purchasers to buy interests in the same piece of real estate.
Traveler Fee: Also known as a service fee, the rental service adds this amount is added onto the total that someone renting a vacation property must pay.
V
Vacation rental: renting out a property for short-term stays (under 30 days).
Value-Added Items: Amenities such as porta-cribs, high chairs, hot tubs, pool tables, and sofa beds that when added to any property could increase its occupancy level.
Villa Holiday: In Europe, the term villa rental or villa holiday is preferred for rentals of detached houses in warm climates. Villa holidays are super popular nowadays, especially in the summertime, with favorite destinations including the United States Virgin Islands, Italy, Spain, France, Germany, Greece, and Turkey.
VRM Commission: A fee that is charged by a vacation rental management company to the owner of the rental. This is usually a percentage of the rental’s revenue rather than a specific dollar amount.
W
Weekend pricing: nightly rates specific to the weekend. These rates are generally higher due to an increase in demand.
Welcome book or binder: a house manual. Welcome guests to the space and provide answers to common questions and local recommendations.
Welcome letter: a brief letter introducing your guests to the property.
Wire Transfers: Bank to bank transfers of monies. Simple as that.
Y
Yield Management: As the demand for vacation rentals – and the competition – increases or decreases, the yield management is the adjustment that the property owner makes on the price of the property.