10 Questions to Ask Before Choosing a Vacation Rental Property Manager
By Tom Feldhusen, InvitedHome Co-Founder and Chief Product Officer | 3/27/2018
If you have a second home and have been managing its short-term rentals on your own, you’ve likely run into what hundreds of other second homeowners have experienced: Your vacation home has become a burden, not a joy.
It’s not uncommon to hit this wall, and indeed the stress of owning, maintaining, and renting a vacation home has helped fuel the extraordinary growth in the vacation rental property management industry. As a result, you now have dozens of options when it comes to choosing vacation rental management companies. But with such choice comes uncertainty. Which vacation rental management company is best? Should I choose a local or a national company? Why is there such a disparity between different vacation rental management fees?
Choosing the right property manager doesn’t have to be stressful. We’ve put together a list of the most critical questions to ask if you’re currently in talks with a few different property managers. How they answer these questions will give you strong insight into what kind of relationship you’ll have with them - and how well your home will be cared for - should you engage in a partnership.
What to consider: Local property management companies have a deep knowledge of the market. You know they’re nearby for anything you or your home may need, and they likely have a strong reputation within the community. The downside with smaller, local operations is the lack of resources, particularly when it comes to marketing. Often, these managers don’t have the capacity to dedicate the necessary energy into the listing optimization, email marketing, photo and home description updates, and social reach that are necessary for standing out in a saturated market, nor the time to manage inquiries and guest services.
On the other hand, national managers will often have the marketing resources necessary for succeeding in today’s vacation rental space. The drawback, however, is the lack of attention you may receive. Some national vacation rental management companies have thousands of homes spread out across hundreds of cities, making it nearly impossible to give you and your home the right amount of care.
In your search for a property manager, you’ll need to decide what services are a good fit for your vacation rental. Here are a few different offerings:
Strictly Marketing These vacation rental networks will handle your listing across multiple OTAs, but that’s about it. The lack of additional services is reflected in the management fee - typically the lowest tier in the industry.
Marketing + 3rd party maintenance and cleaning Some property managers will handle the marketing and bookings, and refer maintenance companies they work with. Often, these managers will handle the communication with the maintenance companies, so you won’t have to.
Full-Service - A full-service property manager will handle everything required to run a well-performing vacation rental. This includes:
Perhaps more than any other industry, the old maxim “you get what you pay for” holds true for property managers. If you’re committed to finding the lowest rate, don’t expect to receive full-service offerings.
Today, vacation rental property management fees range between 10% and 50% of your gross vacation rental revenue. These disparate numbers come with equally disparate levels of care, service, and attention to the homeowner, and often, the lower end of the spectrum comes with many hidden fees.
If a property manager can’t clearly explain what’s included in their fees and how they’re structured, this should be an immediate red flag. InvitedHome is a full-service vacation rental management company for high-end homes in premier destinations. For the large majority of our homeowners, choosing InvitedHome isn’t a price-point decision. They arrive at the decision based on who will offer the highest level of care for them and their home, the most advanced technology in the industry, and the most comprehensive revenue strategies.
To learn more about what InvitedHome's fees cover, take a look at our blog post here.
Guest screening is a huge part of ensuring minimal wear and tear on your home, and it’s one of the top reasons homeowners are increasingly using 3rd parties to manage their vacation home bookings. If vacation rental managers don’t have a thorough guest vetting process in place - opting for maximum occupancy over long-term value - the quality of your home can quickly deteriorate. Be sure to ask:
It goes without saying that cleanliness and consistency are critical in your vacation home. To get more specific answers, try asking the following questions:
You should know exactly what your property manager is providing for guests. Is it the bare minimum - a welcome sheet and nothing else? Or, do they go above and beyond for guests to ensure an unforgettable experience?
At InvitedHome, we know how important the guest experience is for consistent bookings. We do all we can for your guests, knowing that happy guests mean more high-dollar bookings - and happy owners. Here’s one response we received from a recent guest in Telluride that we believe sums up our guest experience better than anything.
“5 stars wouldn’t be enough to measure the quality of service provided by InvitedHome. This is the second time we’ve rented a vacation home through InvitedHome and we couldn’t be more satisfied. Congratulations for your impeccable standard of quality.”
- C. Menezes, on Pinnacle at Cassidy Ridge in Telluride
This is what we strive to provide guests in every one of our homes across the country.
An easy way to quickly frustrate both guests and owners is to pass large charges onto them. If guests get hit with too many add-on fees, it can drastically deter bookings. A few fees to ask about include the credit card processing fee and the restocking fee.
It's true that passing fees onto guests has become standard in the industry, and is billed as a way to enhance the guest experience. For example, Vacasa has a guest fee of 12 percent, while Turnkey passes 9 percent onto the guest, and also charges a "resupply fee" of $7. The VRBO/HomeAway guest service fee operates on a sliding scale, which we explain in detail in this post here. At InvitedHome, we've developed a way to provide a consistent, high-end experience, and we accomplish this with only a 5 percent guest fee.
A few more questions to ask include:
It’s important to ask what pricing strategies they’ll use to achieve a balance between high revenue, low wear and tear, and personal use. What is their strategy for initial pricing to attract first guests and positive reviews, and how does this evolve into a longer-term, ongoing pricing strategy?
If a vacation rental manager doesn’t have a plan to attract attention with initial pricing, monitor activity and adjust the price accordingly, and then use ongoing dynamic pricing strategies, lookout. You could be leaving money on the table with every booking. At InvitedHome, we look at several variables to identify the ideal nightly rate, which you can learn more about in our post here.
We live in an amazing age with so many tools and technologies available to us. If a potential vacation rental company isn’t taking full advantage of that, be wary. Property managers that invest in the right technologies can dramatically improve efficiency, resulting in cost savings that get passed on to homeowners like you.
One of our core pillars is to always stay ahead of the competition. We do this in part by continually looking for and investing in emerging technologies that will help us get the job done better and faster. From our proprietary HomeCraft system to our partnership with NoiseAway, we’re always a step ahead of the industry.
It sounds simple, but one of the easiest ways to get a feel for a property manager is to find out which of their homes are listed on major rental sites, and look up the quality of the listings, how many bookings they’ve received, and what kind of reviews they get. Granted, a single listing or review won’t give you an exact picture of the company’s overall operation, but it’s still great insight into what you can expect.
After asking these questions, be sure to check out the company on the Better Business Bureau, where you can see reviews of the company and their rating. Similarly, looking at reviews of the company on Glassdoor will give you a feel for how the company is operating internally.
We invite you to ask us these questions - and any more you can think of. Our owner consultants are standing by to explain each of these to you, and more about why InvitedHome is the best choice for luxury vacation rental management.
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In our post on how much you could make from your vacation rental, we cover all the variables that will affect your home's nightly rate and annual revenue.
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Here we break down the difference between two of the biggest players in the world of vacation rentals: Airbnb and VRBO. We'll tell you the differences in pricing, offerings, and more.
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