So you’re thinking about hiring a property management company for your vacation rental.
Maybe you’ve got an extra home, you just purchased a new property, or you’re exploring ways to make some extra income. It could be your first time dealing with vacation rentals, or maybe you’ve been burned by property management companies before.
A question you may be wondering is why shouldn’t I just do this myself?
While there are owners who handle management themselves, it can be incredibly time-consuming to:
- Promote your rental
- Field traveler inquiries
- Take quality photographs
- Write and revise the listing
- Answer questions about your property
- Vet potential guests
- Juggle on-the-ground services like cleaning and maintenance, and follow up for reviews.
There’s a better way. Hiring the right vacation rental management company for your home can take the stress tasks, extra time, and marketing responsibilities off your plate.
However, before you hire a traditional or local property manager, make certain that you ask these seven questions to know you’re getting everything you need.
HOW IS VACATION RENTAL PERFORMANCE IN THE AREA?
You’re looking for a manager that has a fantastic feel for the local market. A great property manager will know the ins and outs of your location — high season, low season, competing rates, what sorts of property are popular in the area, and the way local regulations and trends are affecting vacation rentals.
Ask your potential manager questions about the local market and feel out their responses. If the vacation rental manager has reasonable answers to those questions, you’ve probably found a solid manager who spends a good amount of time thinking about how to help their customers succeed.
If they seem uncertain or their answers seem off, you may want to keep looking. Be particularly wary if you know about regulations in the area that they don’t; every manager should be fully aware of the status of local short-term rental regulations. And don’t base their expertise years in the business. There are quite a few longtime property managers out there who haven’t kept up with changes in the industry and don’t perform well as a outcome.
WHAT ARE YOUR FEES AND CONTRACT TERMS?
Before employing a local property manager, do the math to determine whether you can afford to pay that high of a fee and still meet your rental income goals.
Contracts are the greatest sticking point for owners who have wound up with a poor property manager. If you figure out in the first two months that the property manager isn’t doing their job well, but you’re locked in for a year-long contract, you’re going to be unhappy for the remaining ten months of that year.
You’ll also want to learn the payment terms and timing. Some managers can take months to pay and, if you are caught in an unfavorable contract, it can be a long time till you get paid.
If a management company requires a contract, ask whether there are any out clauses based on performance or poor service. For example, if the management company fails to clean the property three times in 1 year, or just gets you two bookings in six months, you should be able to leave their service without a penalty.
Above all, make sure any fees and agreements allow you to build a vacation rental business that prioritizes guest experience over short-term profit.
WHAT SERVICES ARE INCLUDED IN YOUR MANAGEMENT FEES?
You’re selecting a vacation rental management company for the high level of services they provide. You’ll want to know exactly what services are included in their fee.
Specifically ask whether the fee covers marketing, photography, writing the listing, updating the listing, observing market trends, cleaning, maintenance, pre-stay walkthroughs, or in-person visits for any issues that arise during a guest’s stay.
You should also ask about any services that are not included in their fee — for example, some property management companies will charge an additional fee if one of their workers has to visit the property outside of business hours to address a problem the guest is having. Fantastic guest support shouldn’t cost more.
As soon as you know what services the fee does and does not cover, ask yourself if you are getting enough bang for your buck. If your management company covers everything from marketing to maintenance, the fee may be worthwhile. If it covers cleaning and all other services are a la carte, you should probably keep searching for a better deal.
HOW DO YOU MARKET MY PROPERTY?
This is an important one. Ask them how and where they’ll market your property.
Many vacation rental management companies prefer to market their clients’ properties only on their own site. These days, that’s insufficient. You want to be on all the major sites with highly professional listings. No matter how popular a local manager’s website is, it is never going to get the same amount of traffic as major online listing sites like Vrbo, HomeAway or Airbnb — which means you’ll be missing out on a lot of potential guests if you are restricted to one website. Make sure you understand their marketing plan.
Marketing is a big word that includes the photography of your rental, a high-converting property listing, framing your rental for current trends and the market, and how it is promoted.
A vacation rental manager’s 25-50% ought to cover the cost of marketing your property on at least one major listing site in addition to any marketing efforts they make to raise the profile of their own website. Listen for words such as”appear high in the search results” or”search engine marketing” — these are good indicators your manager has put effort into raising and maintaining their site’s profile online.
Your manager should also actively solicit reviews from happy guests and follow up with guests who have already stayed at the property to see if they want to book again next year. Ask your vacation rental manager what they do to ensure repeat business and 5-star reviews to lure new guests to come and stay at your property.
WHEN AND HOW ARE GUESTS ABLE TO BOOK A PROPERTY?
Vacation rental managers aren’t awake around the clock(which is just fine, because most guests aren’t either) but they ought to be available when individuals are most likely to be making their travel plans: before work, after work, and on weekends.
If your manager is only available to make bookings from 9-5 on weekdays, the chances are very good you will be missing out on bookings from those who work standard office jobs at those hours. Believe it or not, the ideal response time for questions is 15 minutes, so the bar is pretty high for supplying the kind of service that turns into bookings.
You should also ask if guests are able to book online and use a credit card. The vast majority of guests prefer to book online, and very few are eager to get on the phone or send a paper check in the mail. If your potential manager doesn’t offer any way for those guests to book online, you’ll again miss out on bookings.
IT’S TIME TO RETHINK VACATION RENTAL MANAGEMENT
The traditional models of vacation rental management are outdated. Doing it yourself is a LOT of work and, as we’ve covered, working with traditional property management companies means less control with fees that are hard to justify.
But there’s a better way. You don’t have to do it all yourself. And you don’t have to sign a contract with an overpriced property manager