One of the greatest things about owning a small vacation rental or renting out just a room in your house is that you can often manage everything yourself. But if you own multiple vacation rental properties or live far away from some of them, handling every aspect of your business can be very difficult or even impossible. In those cases,property management companies can be very useful.
Even though most property management companies charge their clients based on the services they provide, both services and fees can vary greatly from one company to another. Considering these aspects, it’s worth shopping around for the most advantageous offers so that you can choose the most appropriate property management service package for your properties.
Types of Property Management Services
When searching for the best property management company, it’s important to look at the types of services each company provides and the types of properties it manages. Here are the most common services that property management companies offer nowadays.
Property evaluation: A property manager will inspect the interior and exterior of your properties and perform detailed documentation. As well, he or she will offer recommendations on any cosmetic improvements and repairs that might be necessary in order toimprove your booking rate and earn more revenue.
Vacation rental pricing: To help you determine the optimal rental price for each of your properties, the property manager will check the rental rates of the comparable short-term vacation rentals in the area.
Cleaning, maintenance, and repairs: The property management company will often coordinate and/or handle any maintenance tasks and repairs necessary to keep your vacation rentals in tip-top shape. Additionally, the company will clean your properties after each stay and check that your rentals are clean before guests arrive.
Property advertising: The company will take high-quality photos of your properties and write enticing property descriptions in order to post them on different vacation rental listing sites, such asAirbnb,Vrbo, andBooking.com. Most property management companies also use a variety of niche platforms to advertise the vacation rentals they manage.
Accounting tasks: Using a complete lodging software solution, the property manager will complete a series ofaccounting tasks, including payment collection, bookkeeping, and reporting. As well, he or she will issue different financial statements (e.g. balance sheets, cash flow statements, and P&L statements) per property.
Whether you’re in the vacation rental business solely for the investment opportunity, or you feel overwhelmed by how much work is involved, a property management company may be the answer you’re looking for if you can afford the cost.
How Much Do Property Management Companies Charge?
As mentioned above, how much a property management company charges depends on the services it provides as well as the type, size, and location of the property. Most companies require either a flat monthly fee or a percentage of the rental income or maybe both.
The flat monthly fee is a great option particularly for vacation rental businesses that don’t have a regular rental income. Although a flat fee might seem like a good deal at first, one drawback is that you’ll need to pay the fee even when you endure multiple months of vacancy. Most property management companies that have the option to charge a flat rate tend to range from $100 to $150 per month per property.
The other option is to pay a fee based on a percentage of the rental income, which usually ranges between 10% and 40% of what a vacation rental makes. However, depending on the type of property and its location, the fee can go all the way up to 50% of the rental income. Generally, urban rentals, which are smaller and easier to access, have lower fees that don’t exceed 25%. Conversely, beach and mountain rentals tend to see higher fees, which range between 25% and 45%.
Besides choosing between a fixed fee and a percentage fee, you also need to opt for partial- or full-service management. While partial property management basically means that you’ll handle some of the responsibilities associated with your vacation rentals, full-service management provides a more “hands-off” approach in which you delegate most or all of the property management tasks to a property manager.
But that’s not all. If you’re looking for a more hands-on approach, consider using a comprehensivelodging management software solution. A complex PMS solution will help you handle many areas of your business, including pricing configuration, channel management, guest messaging, reservations, housekeeping, payment processing, accounting, reporting, and much more. By putting your vacation rental business on autopilot with the help of a good PMS system, you can delegate just fewer tasks to a property manager and save on vacation rental management fees. This will eventually increase your bottom-line profits. For more information on how you can use our unique and powerful suite of features to run your entire vacation rental business,request a personal demo or drop us a line using ourlive chat option!