Recently, hundreds of Verde Valley residents received slick mailers from a Portland, Ore.-based vacation rental management company offering to look into their properties to see if they would be worth a partnership to turn their home into a vacation rental.

While Airbnb and VRBO are the booking platforms between vacationers and property owners, these other companies offer to manage properties on behalf of homeowners.

There are about 40 such companies in the United States that manage between 1,000 and 90,000 rentals each, handling the maintenance and housekeeping of properties. While the booking platforms work some­what cooperatively — nothing precludes a renter posting a property on a dozen different sites — the property management firms are cutthroat, with each jockeying for properties in prize markets, of which Sedona is one.

Since the passage of Senate Bill 1350 in 2016 that legalized vacation rentals across the state, Sedona and the Verde Valley have seen a massive influx of these rentals, pushing out long-term renters, both workers and retirees. While many residents may be concerned with why their neighbors might suddenly turn their long-term rental or second home into a profit-gener­ating short-term vacation rental, it would appear that our housing crisis may be less organic and more manufactured than we previously thought.

Rather than homeowners deciding to turn their guest house or second house into a vacation rental, researching the pros and cons, then surveying whether to run the property themselves or search out the best management company for their budget, expecta­tions and neighborhood, it would instead appear that owners get a slick mailer like this, suddenly see dollar signs at the words “revenue-generating” — and immediately want to convert their property to make some of that sweet, sweet cash the adverts promise.

Some could say that profit-driven vultures are preying upon residential neighborhoods seeking to undermine the residential zoning model to build profit-driven de facto mini-hotels earning profits for them­selves with little or no overhead costs on the backs of local, gullible, greedy “partners,” while others — who employ them or sign up for this model — can instead legitimately argue there was nothing illegal about this activity and it helps existing homeowners turn a profit on their properties or even just help homeowners on limited incomes make ends meet.

Both arguments are in effect true, depending on your point of view.

However, there is a significant question about the long-term sustainability of this business model.

Sedona and the Verde Valley saw a massive uptick in travelers during the start of the coronavirus pandemic in 2020 as residents from Arizona and California facing lockdowns and travel restrictions, but who still wanted a vacation somewhere, chose the wonderful outdoors of Sedona and the Verde Valley. A vacation rental allowed them relative social distancing at night while they went hiking during the day.

Whereas the rest of the country and now parts of the world with big tourist destinations have opened up for travel, tourism in the Southwest may see a drop as visitors return to other locations — foreign countries, beaches, theme parks, major cities with amenities, ski slopes, etc.

Likewise, international tourists may not be coming in the same large numbers that they did in years before. Much of the world is still enduring travel restrictions and, in general, the shock of the COVID- 19 pandemic in some parts of the world has put a damper on the kind of free-for-all international travel in years past.

Sedona hotels could generally absorb tourist numbers with some spillover to vacation rentals and that more or less still holds true. But when there are several thousand vacation rentals to choose from, the market limits which ones may get selected by visi­tors. So potential homeowners could spend thousands in renovations to make their property ideal for a vaca­tion renter, but due to location or price or bad reviews, they could find themselves with a property that isn’t making any money, or in the end, losing it.

For property owners, consider the long-term financial stability and community benefit of renting a property to a long-term renter or family that needs a place to live while they work in Sedona or the Verde Valley. If you do want to enter the vacation rental market and can afford renovation costs, research the options; don’t just jump at the first huckster who mails you a flyer. Remember, they’re looking at their bottom line, not yours.

Christopher Fox Graham

Managing Editor