Vacation Property Management Tips for First-Time Investors
- March 5, 2020
Many people interested in running a vacation home business often ask the burning question: Do vacation rentals make money? The… Read More
Do you have a secondary home you are hoping to earn some additional income from? If you haven’t thought about hiring a rental property management company to handle your vacation rental, it’s probably a good time to consider it.
The number one question many owners have is why not handle the rental property on their own? While it may seem very simple and straightforward to do so, managing a rental property can be very time-consuming and complicated. There are many aspects of leasing a vacation spot that need to be addressed before proceeding with this decision.
Some of the intricacies of vacation property management include things like marketing to promote the rental property and respond to requests. These two tasks alone can take up more time than people realize. We recommend leaving this to a rental property management company that is reputable and knows how to get ideal people into rental spaces.
This means asking the right questions, doing adequate research and taking the time to properly vet people who may be potential guests. Other aspects of vacation rental management include maintenance and clean up.
Before you settle on a rental management company, here are some of the things you should consider:
Having an idea of the local market and how rentals perform in a particular area will help you know what to expect with your rental property. Managing your expectations is key in avoiding disappointment and will help you understand what the market offers. You can get this information from a property manager.
In fact, this is a good test when shopping for rental property management companies. You want to make sure that the property manager you hire is knowledgeable about the market and is up to date with current trends and other relevant information in the region. Airbnb management in Toronto differs from Airbnb management in another region of the country, so finding a local company is best.
Another thing a property manager should be able to tell you is when the high and low seasons are for that particular area. This is important to know because it will help in your planning. Some owners opt to only rent out their property during the high season and reserve the property for their own pleasure and enjoyment during the low season.
While experience is an asset, don’t let this be the sole factor you rely on. There are many property management companies that have been in the game for decades but have not taken the time to keep up with trends of the property rental industry. So make sure you ask questions that give you a good indication of how up-to-date the companies are.
Sometimes vacation rental management companies can have fees that range anywhere from 25% to 50% of your rental income, and the rates can continue to rise even higher. Before you zero in on a particular company, make sure you take their fees into consideration and calculate to see whether it makes financial sense for you to hire them.
The second thing you need to pay attention to is the contract itself. Contracts tend to have a lot of terms and conditions and can be quite lengthy. Sometimes people tend to skip over the fine print and other details, but it is very important that you take the time to read and understand the terms completely. If possible, get an attorney to read over the contract and explain anything you may be unclear on.
There are long-term and short-term contracts. It’s a good idea to start with a short-term contract to see how the relationship goes between you and the rental property management company you hire. The last thing you want to happen is for you to encounter problems early on in the contract and not have the ability to pull out of the agreement because it is a long-term contract. Make sure you know what the penalties are for ending a contract prematurely. Also, find out if the company you’re interested in has an out clause and if any of those clauses are based on poor performance.
Vacation rental management companies offer different services to their clients. Some are included in the fee and others call for an additional fee. Make sure you find out what services are covered under the standard fee. Some services you should get clarity on are:
When it comes to finding the right rental property management company to fit your needs, never be afraid to ask for specifics: What is the property management company’s marketing strategy?
How and when can guests book the rental? The more questions you ask, the smoother the relationship will be between you and the rental management company you hire.