How Much Does Vacation Property Management Cost? | Minnestay

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How Much Does Vacation Property Management Cost?

Added: Apr 15, 2018
Category: Vacation Property Management

How Much Does Vacation Property Management Cost?

Are you considering the services of a vacation property management firm to take care of your vacation home?

Managing a vacation property is an incredibly costly and time-consuming process, which is a primary reason as to why many owners decide to step away from the rental business. In many instances, the property owner will take to this task alone and handle every aspect of the process from preparing the property for guests to maintaining the condition of the building and taking care of the tax returns.

At the same time, this is certainly a matter of choice, for there are reputable vacation property management services which cater to the above and take away the major concerns which are often on the mind of these same property owners.

With this in mind, let us take a closer look at vacation property management cost, what it involves, and reasons why many owners are now turning to this service to take care of this frustrating process:

The Basics of Vacation Property Management

In case you might be asking yourself, your vacation property management cost covers every aspect of maintaining and renting out a property, from promoting the property and fielding inquiries to vetting potential visitors and communicating with representatives for onsite maintenance. As you may know, these are merely examples of the tasks involved and each one is highly time-consuming.

For some vacation homeowners, the time and energy it takes to manage this property simply are not available. However, in other circumstances, the prospect of having someone take care of these somewhat menial and time-consuming tasks is more than enough reason to consider such services an investment.

Although the extent of this service will also change depending on the circumstances, for some owners like to take care of certain aspects of renting while the property management firm may not always offer the precise service which the client needs.

Important Points Relating to the Vacation Property Management Cost

Vacation Rental Managers

Managing a vacation rental is a hugely demanding task and this usually requires significantly more time than a standard property. In case this might be unclear, we need only consider the amount of time it takes to check guests in and out or the communication required for a large number of potential guests. In order to reflect this extra work, the fee for a rental property manager is always higher than the cost of a typical property manager

Fees and Contract Terms

You may be familiar with the percentages involved but this will always change in every circumstance. As a rule, rental management fees are usually between 20-25% and this amount is decided based on many factors including the profitability of the specific rental. Naturally, this figure is agreed in a way that feels mutually beneficial as the management firm will want the owner to be happy with the cost and appreciate the value of this service.

As for the contracts, this is often the most complicated part of the process but a trusted property management firm is usually quick to put the owner's mind at ease. That is to say, substandard management is more concerned with making money while a good manager will seek to reassure the property owner and set out a contract which will be straightforward and beneficial to both parties.

However, as the owner, you should take interest in any clauses and ensure there is a clause which will hold the management team accountable. For example, contracts can sometimes include a clause which allows the owner to cancel the arrangement in the event of negligence or a particularly low number of bookings in any given period.

What is Included in Vacation Property Management Fees?

Management fees are always agreed prior to the start of any arrangement but the services included with regard to these fees is always different. Many property managers charge an extra fee for unexpected incidents which require a representative to visit the property while cleaning, promotion, repairs, and maintenance are often an added expense which is charged at a later date.

Either way, property owners should always seek to understand what is covered and ask questions if they are in any way unsure about the services included in these fees. Again, while poor property management will seek to extract as much money as possible from their client, reliable firms are likely to ensure that the owner is up to speed and fully aware of the fine print in a contract.

The Benefits of Property Management

Stepping aside from the cost for a moment, let us take a quick look at some benefits to having a vacation property management to take care of the proceedings:

Sales and Marketing

Although some property owners will have the time on their hands, there are few which have the marketing knowledge and experience you will find at a professional firm. Rental property management firms know all the tricks and tips when it comes to getting guests interested in the property, not to mention the sales skills it takes to close the deal.

Lead Generation

Promotion is one thing but many firms will also have access to a pool of previous guests who are often a direct target market for alternative vacation homes. At this point, management firms can also save time in a sense that the guests were previously vetted and in the long term, this particular strategy can result in a steady stream of guests for the property.

Reviews and Updates

When a property manager takes control, owners can forget about the reviews and wait for important updates rather than concern themselves with the minor details. In this sense, no news is often good news for the owner and the next phone call is usually a report to say that everything is well on location.  

Lost Opportunity

Vacation homes all over the world are sitting idle when they could be used as a source of passive income. Instead of the lost opportunity that comes with a property not being listed, management firms make the most of empty space and time by gaining traction and renting out the property whenever it may be available.

Time Saved

In case you have yet to notice, rental property management saves the owner an incredible amount of time. In fact, management firms know that between five and ten call or email inquiries are required just to organize a single booking. However, this also saves ample time when it comes to the time it takes to advertise the property, organize repairs, check security or ensures the property is clean in time for the next guests.

The Importance and Value of Vacation Property Management Cost

In case you might be asking yourself, we fully agree that between 20-25% is a significant amount to be expended on a monthly basis. In some cases, this could constitute a full-time income for a single employee or even a nice nest egg upon retirement.

However, as any vacation homeowner will know, property management is a time-consuming role that requires a lot more than answering the phone and handing the keys over to the next guest. In fact, the extent of work involved in this process is often so overwhelming that owners decide against renting out their property and leaving it sitting until they come back on vacation the following year.

With this in mind, you should see that the percentage is more than fair for the great experience and workload involved in this task, not to mention the absence of frustration you can look forward to in future.

Still not convinced? Get in touch and we can get your rental vacation home ready to thrive!

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