The following video transcript is generated automatically by a computer algorithm that learns and gets better on a daily basis. Please accept our apologies if some content below doesn’t make sense:

So what are some of the risks that you’re going to run across in this business and what are you going to want to do to try and mitigate them? Now? You can categorise most risks in two ways, really, one is the size of the impact. If the thing goes wrong, like how big of an impact is it going to have? And the other is how likely is it that this thing is going to happen? What we’ve done here is we’ve put them in order of importance, highest impact things first. I slightly has things first and then going down in order of importance. So these are all things that could potentially come down the line. You want to have plans and processes and ideas in place of how you might mitigate some of these things. We’ve mentioned some of these in some of the previous sections and some of the upcoming sections, some of the ways in which you can start to mitigate some of these problems. But these are all things that you want to have considered and you want to have something. Either in your planning or in your thought process of how you’re going to deal with some of these things, were they to come to pass? So first of all, high impact. High likelihood. Top one, the seasonality. So with most. Rental models, you’re going to have seasonal effects on pricing. You’re going to have on short term less for tourists. You’re going to have high season where you’re gonna make a majority of your money. If you miss out on high season, then that’s gonna be a big hit to what your potential income could be. You want to make sure that you’re ahead of the game when it comes to knowing what the seasonal patterns are and what kind of impact I might have. If you miss high season, you could be in trouble. Another high impact, high likelihood risk here is what your. Pricing strategy is and how your process runs for setting those prices. You need to stay ahead of your competition. You need to be on top your competition. You need to make sure that you’re not missing out on any income just because you haven’t got a process in place or you your system for coming up with prices isn’t quite good enough or you’re missing a trick. You need to be on top of that kind of stuff and you need to be mitigating those risks. Next up, high impact, but sort of medium likelihood news and events. We’ve talked elsewhere about the importance of staying on top of news in your local area and looking out for things that might be going on in the short, medium and long term time horizon. New infrastructure being built that might cause lots of annoyance from construction and things like that that will hit demand. But in a few years time, it might be some new reason for people to visit the area or want to be there or want to pay more money for it. Regulation, government, taxation, insurance, changes to those kind of things. You want to stay on top of those? You want to stay on top of. Why is it that people are coming to an area and why they might they be put off coming to an area? Might there be an event coming in the future which will attract more people and you can charge more money for it? Demand will go up. Will there be an event in the future which will, you know, cause people not to want to come or certain class of people who pay more money not to want to come? You need to stay on top of this kind of stuff so that you can set your pricing strategy accordingly. Medium impact, the high likelihood this is a market with quite low barriers to entry, meaning you’re going to have a lot of competition in these markets. Now. The best way to mitigate something like this is to be super on top of your operations and your pricing strategy again. Elsewhere, we talked about the importance of data and benchmarking and staying on top of your pricing process and strategy. That’s going to be vitally important, even though there are low barriers to entry. And there’s going to be a lot competition, there’s gonna be a lot of unsophisticated competition. Prices are going to tend towards commodity. So you need to find ways of adding value to your properties such that you avoid becoming a commodity in the market. What is it you can do or offer? They’ll keep you ahead of that pack. Medium impact, medium likelihood, problem sentence. Are they going to trash the place? Are they going to not pay? Are they going to complain loudly and leave you bad views, things like that? Again, try and think through what all of these things might be and how you’re going to approach them if they happen, if it’s, you know, something relatively minor in many cases, it’s actually worth just holding your hands up, giving in and refunding people’s money. Make the problem go away because the lingering effects of problems pedants. It could be quite bad on business. So what was your plan for the different situations you might find yourself in? And finally, medium impact, low likelihood, bad reviews. Now, the majority of your reviews will be fine, but very occasionally you’ll find someone with a real bone to pick for whatever reason, or someone is going to try and extort you in some fashion. I have a plan. Stay on top of that kind of stuff. Stay on topic reviews. Cheque them regularly. Make sure and file a grievance or complaint with the various review platforms if anything comes along, which you feel is unfair. What’s going to impact you on Julie? And the other thing is property quality. Now you want to be aiming for the high end of the market. You want to be looking for good quality, new newly refurbished properties, things like that. But there are things that go wrong. They may be something in the property which has been incorrectly installed or a bit of a botched job dump somewhere in these the construction of the maintenance that’s going to come up over time. Again, take account of how one of those things likely to be and how how are you set to deal with those when they do crop up?
Share This