If you own a vacation home, you’ve likely enjoyed many weekend getaways and time with family and friends. But what’s happening at your property when you’re not visiting? If you’re only making it to your vacation home every once in a while, have you considered earning an income by renting it?
Your first reaction might be to feel overwhelmed. Where do you even start? Is the stress of trying to market and book your home, while trying to maintain it between guest stays, even worth the extra cash? This guide will help you better understand what property management companies do and how one might be your ticket to easy renting and a new cash flow.
Choosing whether to manage your own vacation rental
If you’re handy and know the ins and outs of terms like “SEO” and “dynamic pricing,” then you may be able to manage your rental property yourself. However, if you’re like the vast majority of vacation homeowners, you struggle to unclog a drain and are currently pondering what SEO could be.
There are multiple sides to managing a rental home. Here’s what’s involved:
– Marketing your property to guests
– Determining rental rates
– Guest reservations and services
– Exterior and interior maintenance
– Housekeeping services
– Management services such as permits and taxes
But renting your home doesn’t mean you have to be an expert marketer or maintenance guru. That’s what full-service property management companies are for. At Vacasa, for example, we take care of the entire vacation rental lifecycle. Every step you see listed above comes standard with every homeowner we work with. And while we’re taking care of your guests and your home, you’ll be earning an income on your investment.
Vacation rental property maintenance
One of the most important parts of a vacation rental is the upkeep. Having a local team conduct home inspections, seasonal walkthroughs, and regular visits ensures your property is always in tip-top shape and ready for your next guest.
Reputable management companies will have both a property manager and an operations manager. They work closely with licensed, bonded, and insured contractors for any maintenance issues that arise. Electricians, plumbers, roofers, building contractors, heating and cooling specialists, and appliance technicians are on call for when something needs their attention at your home. Property management companies can arrange services such as snow removal, garbage pickup, wireless internet, cable, yard maintenance, and electric, water, and sewage.
Vacation rental cleaning
Just like hotels, vacation homes need a thorough cleaning after every stay. Hotel-quality housekeeping is critical to keeping guests happy and maintaining positive reviews. Unless managing your rental will be your full-time job, it will be difficult to complete a proper cleaning yourself every time guests leave.
Property management companies can refer you to housekeeping vendors, or if you work with us here at Vacasa, we hire our own. You can rely on housekeepers to supply your guests with items like shampoo, conditioner, paper towels, toilet paper, and dish soap. If you decide to hire a company for housekeeping, be sure to confirm in your agreement that they include these supplies.
Housekeeping services for short-term rental properties can also include seasonal deep cleans and regular housekeeping inspections. Some companies will even provide linens for bedrooms and bathrooms.
Vacation rental marketing
Marketing your home is critical to your success as a short-term rental homeowner. Without it, you won’t have steady bookings. Vacation home marketing is complicated. There are hundreds of websites that offer booking platforms, such as VRBO, Airbnb, HomeAway, Booking.com, and TripAdvisor. To place your home on each of these sites would be costly and time-consuming.
Full-service property management companies don’t just take care of your home—they also take responsibility for getting your home rented. Professional photography, virtual tours, and search-engine-optimized content is provided for your home’s listing. Then, your listing is placed on the top booking sites to strategically engage with the right renters. Some companies, including Vacasa, use Google Adwords and social media platforms for marketing as well. If you allow your vacation home to be marketed by a top property management company, your rental should be booked more often than not.
What is dynamic pricing?
Ever wonder how vacation homeowners determine their rental rate? It isn’t easy. In fact, hundreds of factors go into accurately pricing the nightly rate for a vacation home. It’s called dynamic pricing, and it optimizes your rental rate to give you the best ROI. At Vacasa we account for seasonality, local events, proximity to popular attractions, timing, market rates from third-party sites, and more. Our rates adjust four times a day, ensuring that every home is priced to maximize its booking potential.
If you choose not to work with a company that provides dynamic pricing, you may miss out on some income. Because top companies use sophisticated software to to predict how the vacation rental industry functions, it would be impossible for you to price your home the same way.
Property management fees
Property management fees differ from one company to the next. Here at Vacasa we charge one comprehensive fee, or commission rate, that encompasses every part of the vacation rental lifecycle. Turnkey has a similar commission fee structure, except there are other fees, such as the cost of household supplies, that aren’t included.
Here are the pros and cons of a full-service property management company:
Pros:
– All marketing, dynamic pricing, booking, and guest services are included.
– Interior and exterior maintenance, inspections, and housekeeping are part of the agreement.
– Permits and taxes are handled.
Cons:
– You cannot pick and choose a la carte services.
– Some companies will advertise one commission rate, but there can be hidden fees.
– Other companies serve as a booking platform, but don’t include property management services. Evolve and Rented.com don’t provide property management services but will connect you with local contractors for maintenance and housekeeping services. Their websites are mostly used for securing rentals and booking guest travel.
The pros and cons for standard rental booking platforms are:
Pros:
– They will use top marketing techniques to book rentals for your home.
– Guest services are included in most agreements.
– Commission fees are lower.
Cons:
– You’re responsible for all maintenance, housekeeping, and administrative services.
– You’ll need to coordinate with multiple vendors to ensure your home is ready for guests.
– There’s no local presence in your home’s market.
– Whichever route you take, working with a property management company will help you navigate the short-term rental road with ease.
Understanding the vacation rental agreement
There are two types of vacation rental agreements you need to understand. First, you’ll have an agreement with your property management company, if you have one. Second, there should be an agreement in place for every guest that rents your home.
The property management agreement will note the terms, including the price, time frame, and services that are included. Be sure you fully understand what you’re signing, and look for extra fees that aren’t outwardly advertised. We recommend you avoid a long-term contract, so you have the opportunity to cancel an agreement if for some reason you’re not satisfied with the company.
Should you ever encounter a problem that you can’t resolve with your property manager, you have the right to file an ethics complaint with the National Association of Residential Property Managers (NARPM).
Among other important terms, the rental agreement you have with your guests needs to discuss who is responsible for what. For instance, if there is damage to your property, will you charge the guests a fee? How much will it be? What are the cancellation terms? Having a legal document in place that has been reviewed by an attorney will protect you and your home. If you partner with Vacasa, we take care of all guest agreements for you, so you can rest easy knowing safeguards are in place.
