March 5, 2022 0 Comments

The question of whether to hire a property manager or property management company as a vacation rental property owner is crucial. It is not easy to manage a short-term rental house. Your vacation rentals are being managed by someone else. We’ll be looking at some things you might need to consider before deciding whether vacation rental management that is completely hands-off is the right option for you.

What does a Property Manager do?

It’s helpful to know the basics of what vacation rental property managers do before deciding whether to hire them. These are the top services that vacation rental management companies offer:

Setting rent rates is easy with market research. This allows you to compare similar properties and determine the price. Management companies also have access to dynamic pricing applications, which use AI and big data to arrive at the best price/occupancy.

Marketing the property: The Manager will first take high-quality pictures and then write a compelling listing that is suitable. Your manager will list all your properties simultaneously on every site with the help of a property managing platform. A channel manager can be employed by your manager to help increase the number of niche sites where your properties are advertised.

Building a booking site for direct bookings: your properties might also be listed on the company’s website, so guests who use Google to book direct will have access to them. This won’t have any impact on your bottom line. However, it will help the manager decrease vacancy rates to increase repeat business.

Screening of high-quality guests: Your manager will likely use automated visitor screening software. This is to make certain that no one uses your property in fraud or for criminal purposes.

Managing maintenance and repairs this option is optional. Some companies offer maintenance, while others don’t. Maintaining everything will keep it in tip-top condition. The vacation rental management company is responsible for handling any call from guests when they inevitably have to clog the bathroom at midnight.

The 5-star experience of curating: some companies offer the guest experience as part of their fee. The manager can provide guidance, recommendations, or up sells to guests while they are residing at the rental.

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After understanding what a vacation rentals management company is, we can now see the benefits of outsourcing the rental operations to a third person. The following factors are the main reasons people hire a management agency:

You may own multiple vacation rental homes. Self-hosting costs you the time you don’t have or don’t want to spend.

You live far enough from your vacation rental properties that you cannot maintain quality control.

A quick note on the vacation rental management fee

Hiring a property manager or management company will streamline the process and operations of managing a rental property. But it is equally important to be financially able to pay for a property manager. This section will discuss the fees associated with short-term lease management and compare them with long-term leasing.

Short-term property management charges

Short-term management, such as vacation rental, requires a fast turnaround. Depending upon the market where the properties are located, the management company might need to coordinate several cleanings and turnovers per week. This is more than long-term leasing. Also, consider guest queries and marketing. Of course, the management company must be available 24/7 to address guest emergencies and respond to mid-stay inquiries promptly.

All this sounds expensive, doesn’t it?

When your compensation structure includes the “commission” model management fee, vacation rental property management costs typically range from 30% to 50%. You may also consider the guaranteed model which offers a lower management fee. This ensures that the property manager earns a fixed monthly income regardless of how often it is rented.

Long-term property management fees

Average long-term property maintenance fees are between 8%-12% of monthly rent, with most property fees around 10%. For properties that have 10 or more units, and larger apartment buildings, rental fees are usually between 4%-7 percent. Long-term rentals can also be compensated using flat rates. The variability in property size and services required means that there is no standard industry figure.