When you’ve decided that it’s time to hire a property manager or you’re looking at purchasing your first investment property, below are a few questions to ask yourself.
First of all, it does not have to be an all or nothing relationship. Most good management companies will have options to work with homeowners. Before you start making calls to management companies, decide how much you want to be involved. Some owners want to be completely hands off, while others enjoy managing their property but need some assistance. An example would be owners that book their property themselves, but need someone local for cleaning, maintenance, and guest services. Others may need help with marketing and filling in the weeks with guests but have a family member or friend that will supervise cleaning and maintenance. Be specific with your potential management company so they are clear on how they can help you.
As for cost, the management company is paid on commission in most situations. Only when your property has reservations are they making any money. The commission typically varies from 15-40%. Don’t let the higher end of the scale scare you off. Listen to what the company is offering for their commission. Same with the lower commission, see what they are offering and ask about additional fees. With higher commissions, it may be all-inclusive; marketing, maintenance, cleaning service, and linen management. In some cases, lower commissions are a hook to get you to sign up but don’t save you money in the long run after fees. Also, keep in mind 1-2% additional commission is worth it when your property has maximum occupancy, and your guests and property are well-taken care of.
When in search of a property management company call or email requesting an information package. Read over what they have to offer and then schedule a meeting, so you can have a face to face meeting to answer all your questions. The management company will probably want to meet at your property, so they can view your home and give you an accurate prediction of revenue. During your face to face here are a few questions you might want to discuss;
Before your face to face meeting also do your homework. Go to the company’s website and read over their policies for rentals and take notes of any questions you may have. Is the website user-friendly? Is it mobile friendly? Read reviews for the properties they have on their website.
When you have your face to face meeting, another critical question to ask is, who will be my contact person? If I have an issue or a question who will I be speaking with about my concern? Some companies have a business development department (think sales), it is their job to recruit new properties for the company, but they are not active in the actual day to day management of your property. Before you make your final decision, it is essential to meet with your actual property manager. Having a great rapport with the company’s recruiter is not going to help much with the management of your property after you are on their program.
If you are satisfied with a company’s marketing plan and day to day procedures for managing your property, you can then decide if they are a good fit for you. Are you going to feel comfortable with your property manager? Is this going to be a good working relationship? Property management is a partnership with the property owner and management company. It needs to be a partnership of trust with good lines of communication. Do your homework and choose the best fit for you and your property.
Remember the old saying, “The 2 best days of owning a boat is the day you buy the boat and then the day you sell the boat.” That doesn’t have to be true with your vacation home. With proper management, your second home can be a great investment. You bought your home to enjoy, not to add additional stress.
Many owners love the hard work and commitment that goes along with self-managing their property. However, most vacation owners also dream of owning a vacation rental, so they can enjoy the home and make lasting memories with their family and friends. They do not dream of talking with irate guests who are upset because the community pool is closed for unexpected maintenance or getting calls from the neighbors at midnight because they have noisy guests staying in their property that they then have to deal with.
The goal is for your investment to be a profitable endeavor and a blessing to your family. With the right partnership of a management company, your vacation home can not only bring in revenue but also enjoyable for you and your family.