Renting out your extra property can bring in additional income. A smart way to find the perfect tenants is to hire a property management company to help you with it. Not everyone is fortunate enough to own a second property that they can rent out. If you have that advantage, maximize the potentials by hiring a company that is an expert in managing vacation rental properties. Beware of companies that promise you a lot but deliver little because they can end up wasting your time and money.
Maybe you wonder if you need to work with a property management company at all. Some property owners find their own tenants and manage the rental themselves. However, that can take an enormous amount of your time. You have to create marketing materials for your property and promote it. You have to write a compelling listing. You have to field questions and answer inquiries. You have to screen potential tenants and meet the ones who want to rent. After the tenants leave, you have to do a follow up to solicit their reviews. As for the property, you have to clean and maintain the property so it will be pristine for the next tenant.
If all of this sound overwhelming, you can spare yourself the effort by hiring a vacation rental management company. Do some research and find a few that have a good reputation. Then, ask each of them the following questions to help you make your decision.
1) What is the vacation rental market like in the area where my property is?
Always work with a company that is very familiar with the local market. The experts can advise you on the most profitable season to rent out your property. They can tell you what type of properties are high in demand, what the average rental rates are, and explain to you what the city's regulations are in regards to vacation rental properties. Review reports on how the vacation rentals performed and make a list of questions.
Companies that are truly experts will be able to answer your questions authoritatively as well as give you insights on the neighborhoods that can give you an advantage in finding the right tenants.
If the company seems vague with their answers and can only provide general opinions without hard data to back it up, you should avoid them. See how much they know about the local regulations around vacation rentals. See if they will provide you with the latest information. A competent manager should have good management experience as well as knowledge in the latest rules about rental properties.
2) What are the fees and the terms of the contract?
On average, a vacation rental property manager will charge anywhere from 25 to 50 percent of your rent. Depending on the region, some fees are even higher than that.
Before you sign the contract, make sure you understand what the fees are and whether they fall within your budget.
It is very important to understand all the terms and conditions of your contract. How long is the contract? Can you terminate it prematurely if you are not satisfied with the service? Read each term and condition carefully so you will not be caught by surprise or have any regrets after a few months.
It does not hurt to inquire if you can end your contract early due to reasons other than poor service. For example, what if they did not find you enough tenants during a length of time? What if they failed to keep your property clean? You should not have to pay a penalty if you choose to end your contract due to these reasons.
The property manager should focus on the guests' satisfaction and experience.
3) What services do the management fees include?
Before you agree to the fees and sign the contract, make sure you understand which services are included with the fees. Typical services may include monitoring trends of the vacation rental market, writing your listing, taking photos, promoting your property, screening and offering tours to potential tenants, cleaning and maintaining the property, and more.
In addition, ask if the company provides extra support for an additional charge. For instance, you might need the company to check on your property outside of regular business hours. Perhaps a tenant has a problem with something at your rental and you need the rental manager to tend to it right away. The property manager should include extra services at a reasonable price.
When you understand what the fees include, you can make an informed decision. Watch for fees that only include cleaning but charge extra for other services. Go with a company that covers many services with one fixed rate because that will make your operating expenses more predictable.
4) What is your marketing strategy for my property?
The secret to a successful rental is marketing it effectively. It is not enough to only list your property on the vacation rental company's website. Nowadays, you must reach farther. You have to promote your rental on all of the popular websites so you can reach out to a bigger market of potential tenants. Even if the property manager is well-known locally, his clientele will not be as vast as that of other listing websites like Airbnb, HomeAway, or Vrbo. The property manager must also list on these major, global websites so you will not miss out on leads.
Not only do you need to list your rental on various websites, but you also need to stay apprised on the latest methods in effectively promoting your rental. Which websites have a high conversion rate? What are the trends? Take attractive photos of your rental to attract interest.
An effective property manager will try to make your listing stand out from the rest. Look for managers who talk about getting a high ranking for your property in search engines. This is someone who knows how to promote your listing effectively on various websites so it will catch the attention of potential tenants. Managers will usually include 25 to 50 percent of the marketing costs on popular websites as part of their fees.
A good manager will not only find the best tenants for you, but after their stay, he will solicit a review from them to get their feedback on their experience. This is an effective way to identity any areas that might need work. It is also a good opportunity to see if the same guests will book again. Ask the property manager on what can get you the highest rating every time.
5) How does a potential guest make a reservation for my property?
The vacation rental manager will not be working around the clock everyday. However, he should work the most during times when vacationers usually make travel plans. Weekends are a popular time, and so are dates around a special event or festival. People typically work from 9 to 5, Monday to Friday, and plan vacations on the weekends. If your rental manager only works on weekdays, you will miss the weekend clients. When potential tenants call to ask about a booking, it is important for the property manager to respond to them withing 15 minutes. If he is not able to do that, the potential client will most likely search elsewhere for another rental property.
Online booking by credit card has become the method of choice among vacationers. This is because it is easy to do, does not take up much time, and it is convenient. Most people prefer to reserve with a credit card. Therefore, if you do not want to lose any potential tenants, make sure that your property manager has an easy way for guests to make a reservation online.
6) How frequently do you send me updates about my property?
You and your property manager must communicate well with each other. After a tenant leaves, the manager should provide you with an update on how your property looks. Was there any damage? Was it clean? If some things were missing, how does your property manager handle that after the guests left?
The property manager is in charge of restoring your property to its pristine condition after the tenant leaves. He needs to take care of any repairs and cleaning. It is his job to make the property attractive again so it will be ready for the next tenant.
The property manager will identify any damage or loss, but he is not responsible for paying for it. He is, however, charged with documenting the damage and giving you a report so you can take of the repairs. To cover this loss, you should obtain a damage protection plan such as Property Protection Plus.
7) Can I get feedback from your current customers?
Before you sign with the vacation rental management company, the most effective way to confirm their reputation is by getting feedback from their current customers. See if they are willing to provide a few names and contact information as reference. The ones with consistently good reviews will not hesitate to connect you with their current clients. However, if the company hesitates, that is a red flag to possibly unsatisfactory service.
Some managers will go above and beyond in giving advice on how you can find tenants without delay. They don't just boast about their abilities, but they actually prove it by their actions. These are the kind of managers you should be looking for.
The old approach in managing vacation rentals is just not enough in this day and age. You cannot manage all the facets on your own, from promoting your property to cleaning it. This is the reason why hiring a vacation property manager is a smart move. He can do all the work while you sit back and enjoy the rental profits rolling in. Just make sure that you hire someone who offers you good terms and who can find the right tenants quickly.