Choosing the Right Management Company
Finding the right management company can be tough. This can be especially tough in Orlando, where there are many property management companies to choose from. Management companies offer different levels of service, packages, and technology for homeowners and guests to benefit from. Some may offer more service at a bigger cost, while others may allow a property owner to be more involved and offer less service. Here's a few ways that management companies differ in their service offerings, and expenses for those services.
There are many different types of property management companies and levels of service that they provide.
Booking Management: Some property management companies only deal with the bookings aspect of a vacation rental home. These services include creating property listings and managing those listings, responding to inquiries, managing rates, guest support, and communicating to a home care team for guest issues, maintenance, and cleaning.
On-Site Property Management: Opposite to booking management, certain property management companies look to service just the property itself. This usually includes regular check-ups at the property, cleaning and inspecting the property after guest stays, preventative maintenance, and other maintenance work orders.
Full Service Management: A combination of both booking management and on-site property management, full service management encompasses every aspect of vacation rental operation. It's focus is to eliminate all worry and work from a homeowner, and considering all services under one company. This allows the owner to have peace of mind knowing their property is looked after from A to Z, while also simplifying the ownership of a vacation rental property. The expense of this level of service is usually higher than booking management and on-site property management services individually, but when combined, can actually save a homeowner money.
Property Care-Taking: For the owners who don't like the thought of others using their vacation rental property, and have the income to afford the property expenses, there are services to lessen the burden of ownership and provide peace of mind while they're away. These services usually include regular trips to the house to check it's condition, maintain the pool, touch up clean, manage pest control, pay utility bills, and any other property specific items that need management.
Structuring a pricing model is different for many management companies. Some companies package a number of items together in their services, and charge a higher commission or monthly rate. Every vacation rental property has the same expenses however, and they need to be paid in some form or fashion. For that reason, it's important to ask the right questions when evaluating different management companies, and to be specific when asking about the fees that they charge.
Management commissions: A percentage of the rental revenue taken from bookings created by the management company. This commission usually ranges from 10% to 30%. Again, different levels of services will come at different prices.
Monthly fees: Charged by management companies usually to cover overhead costs for performing or providing services.
Marketing fees: Charged by some management companies to cover the cost of listing a vacation rental property on marketing sites. This may also come in the form of an additional percentage taken off of the booking, or a discount in the rental rate to booking suppliers. Some may also label these as booking fees.
Cleaning fees: Sometimes charged to guests, sometimes charged to homeowners to further incentivize bookings. Other cleaning fees may include deep cleans, dryer vent cleans (to avoid dryer fires), and property cleans after owner stays.
Linen services: Some management companies cover the initial cost, maintenance, and replacement of linens in the home. There may be an upfront fee for the linens, and there may be a monthly fee for this service. Some may not charge any separately marked fees, and simply include it in the management commission.
Maintenance markup: This is a more common practice in the long term rental industry, but is still prevalent amongst some short term property management companies. This markup can vary from a dollar amount to a percentage of the labor cost.
Credit card fees: A credit card fee passed on to the owner of a vacation rental property for bookings paid for with credit. This varies depending on where the booking was created, and which party is considered the merchant of record.
Again, these fees may not be charged by every management company, and you may not need the services associated with these fees. Once you've figured out the level of service that you need for your vacation home, and you're ready to begin interviewing management companies to find the best fit for you, use this blog as a guide in making that decision! If you would like to discuss management options to help determine what you need, give us a call and we're happy to help.
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