Whether or not your property manager is doing a good job is a top concern for most vacation rental homeowners. You want your property manager to love your home as much as you do and help you make money from your investment.
Generating the maximum amount of revenue possible is why most people invest in vacation rental property, and many opt to hire property management groups to help them realize that goal. According to research by Skift, 36% of owners use a rental management company to handle all aspects of a secondary residence rental, and 26% use a management company to handle some aspects.
“There are a variety of different reasons why you should have professional property management,” says Brandy Boswell, Austin Sales Director at TurnKey Vacation Rentals. “One is how important is your time? You can’t put a price tag on your time. The second really comes down to revenue.”
Property management companies, like TurnKey, have the bandwidth and technology to market homes, monitor market changes, handle bookings, ensure than maintenance, and housekeeping are in order, and provide other services. Relying on a property manager’s expertise can save time and end up paying for itself.
But, how can you tell if your property manager is actually doing a good job? Boswell encourages vacation rental homeowners to ask themselves these questions to determine how a property manager is doing:
Is your vacation rental making money?
How well a property manager is doing will be evident in your revenue, Boswell said. It’s a problem, she said, “if you’re not earning and nobody is reaching out to proactively with suggestions to help.”
More than half of property managers, or 57%, said they adjust rates once per quarter or less frequently each year, according to a recent HomeAway Software survey. But, rates likely should be monitored and adjusted more frequently that, Boswell said.
The “set-it-and-forget-it” model isn’t always the best for vacation rentals, since markets fluctuate and rates need to be adjusted to ensure that a home stays competitive. For example, rates may change in high or low seasons or for big events being held in a specific location.
“Rate management is key,” Boswell said. “Your property manager should be explaining to you what the trends are in the market at all times and managing proactively, so you’re not surprised.”
Is the property manager making suggestions for improvements to my vacation rental?
Just as setting rates is not a one-time exercise, the vacation rental itself will likely need to be updated and improved over time. For example, décor updates may need to be made periodically and maintenance for normal wear and tear needs to be kept up-to-date.
“Occasionally, you’re going to need to some refreshes,” Boswell said. “You can’t just set up the home and not do anything for X amount of years. You have to treat it like a business, and there’s some thought and care that you will have to put in as a homeowner.”
Homeowners should expect property managers to do regular inspections of the home and be proactive about making suggestions for improvements or refreshes that could help maximize the revenue potential of the vacation rental, she said. They should also make sure that housekeeping staff is adhering to standards.
“The more effort you put in, you will see it ultimately in your revenue,” Boswell explained. “But, your property manager should be there to help you, as well, and give you helpful recommendations.”
How is my vacation rental being marketed?
A key component of property management is marketing the vacation rental so that travelers see it when they’re booking their trips. Boswell urges homeowners to make sure their property management team has their vacation rental listed on the top booking sites, like HomeAway, VRBO, Airbnb and others.
Most travelers turn to these booking sites to look for vacation rentals. And, Airbnb alone boasts an average of more than 2 million stay on Airbnb per night, and the company projects that by the end of the second quarter of 2019, it will have had 500 million guest arrivals on its listings since it launched in 2008. .
So, it’s imperative to have your vacation rental marketed on these sites. Boswell said property managers should set up listings, including taking photos and writing descriptions. They will also continually monitor listings to make sure they stay current and will make changes when necessary.
Reviews on travel booking sites are also important, and can help improve a vacation rental’s search results on the platform. Most of the sites send out automatic reminders to guests to encourage them to leave a review, but Boswell said property managers should also ask for guest reviews.
“Those positive reviews are occupancy and ultimately revenue builders for our owners,” she said.
Reviewing your listing on these sites can help you see if your property manager is doing a good job. Homeowners should ensure that it’s been kept current and that reviews are being left. This will set your mind at ease that your property manager is doing a good job.
How often should I be in contact with my property manager?
Your property manager should be easily accessible to owners at any time and always respond to questions or concerns.
For the first 3 months of a listing, Boswell said owners and property managers are often in contact about once a week, as they fine tune listings and iron out any problems.
“In the first 3 months, a property manager should be checking your listing, checking your bookings, checking your rates to make sure they are being adjusted accordingly,” she said. “Maybe that if your calendar filled up too quickly, then we need to adjust those rates higher. If it’s not booking at all, then we need to put in some discounts, maybe we need to look at the listing.”
After the first 3 months, she said contact is usually “as needed,” but that property managers should be pre-emptive about contacting vacation rental homeowners about any issues.
“We’re constantly looking at how people are performing,” Boswell said. “If you’re performing below the goal that we have set, then it’s time to dive deep. Is it the listing? Is it the rates? Is there something missing at the home? Is there something that we could do to tweak it?”
The bottom line, she said, is that communication is an essential part of the property manager-homeowner relationship. Any problems, such as if something in the home breaks or is damaged, should be communicated with the homeowner.
“Your management team should be proactive not reactive, and if you’re having to bring issues to your property manager continually, it’s time for you to move on and find somebody else,” Boswell said.
Is the property manager handling everything covered by the fee?
Property management fees can vary and include different services for vacation rental homeowners. But, lower fees and commissions are not always best.
“What are you losing in service?” Boswell said. For example, is the property management team doing inspections, being available for guests 24 hours a day and performing other agreed-upon tasks.
“When you’re comparing one property manager to another, make sure that you’re comparing apples to apples,” she says. “Check the fees and make sure that there are no hidden fees. Also, what am I getting with that commission? Just make sure you know what you’re getting into.”
Property managers should be transparent about fees. Vacation rental homeowners also need to have a good grasp of what the fees should cover, if there will be any additional fees, how repairs and maintenance will be paid for and other cost-related provisions. Also, Boswell urges homeowners to understand any termination clauses of an agreement and length of time you will be under the agreement.
Is the property manager handling permitting and taxes?
The permitting and tax process for vacation rentals can be a headache, but property managers should be well-versed in the regulations, including occupancy rules. Homeowners often need help navigating this complex process, which tends to vary from location to location, and should be able to rely on property managers for help.
“Depending on where you are, permitting is kind of a maze, and having somebody to help you navigate through 45 pages of rules and regulations is helpful,” Boswell said.
There are also several tax rules that could impact you as a vacation rental homeowner, including local occupancy tax and others. Property managers should keep you informed of everything so that you stay in compliance.
What are some signs that my property manager is not doing a good job?
Overpromising and not delivering is the No. 1 sign that a property manager isn’t doing a good job, Boswell said. Other red flags including not openly communicating, being unresponsive, and not fulfilling the agreed-upon services.
“Being fully transparent and being able to build trust is key,” she said. “And, you’ve got to get a good feeling (from the property manager). And, if it sounds too good to be true, it probably is.”
The best way to ensure that your property manager is doing a good job is to properly vet them on the front end. Boswell suggests homeowners interview multiple property management teams to see which may be the best fit and to ask for references. The relationship is all about building trust and finding someone to work for you to help generate revenue from your investment.
When selecting a property manager, some important questions to ask include:
- Where will you market my property?
- How do you create a truly professional-looking listing for my property?
- Are you available 24/7 and how quickly do you respond to guests?
- Please explain ALL of the fees my guests or I will be charged and what happens with those fees.
- What if I decide I want to work with a different property manager?
There’s a lot to consider when hiring a property manager for your vacation rental, and working with a property manager can help you get the most out of your investment. It’s up to you to decide who will take the best care of your home.
Taking time to hire someone that feels like a good fit will set you up for success, but ultimately, your ability to generate revenue is the best way to tell if your property manager is doing a good job.
Want to learn more about how TurnKey makes our homeowners successful? Schedule a consultation here.