Management Options for Your Vacation Rental
When you first decide that you're going to list your property as a short term rental, you have a lot of decisions to make and one of the first decisions is how are you going to manage your rental?
Today, I'll walk through the top three most common ways that you can manage your rental and I'll walk through the pros and cons of each one so that you can decide which option works best for you.
Option #1: Traditional Management Company
Typically, this is going to be a company that is local in your area that is full service. They are going to handle everything for you, from getting your sites listed or your property listed, they're going to do the marketing and the inquiry management and anything that has to do with the maintenance of the home, as well as the cleaning schedule.
The pro here is that it is full service which means it is stress-free and it's a great option if you are especially not close to your property.
Now, the cons here is that this is the most expensive option. Typically, property management companies are charging anywhere between 30-50% of your rental income, so you'll just want to do the numbers there if you think that this is the option you are going to use.
You'll want to understand how much income they can bring in for you and if they're taking 30-50% percent, what does that leave you and can you pay the bills and hopefully still profit off of that?
Also, something to keep in mind if you go the route of a traditional property management company is that in a lot of cases, the way that they set up is that they will manage your property under their profile, which means that all of the guest data that is associated with your bookings and the reviews, they will essentially own or keep.
If you are deciding that maybe in a year or two, you might want to manage it yourself, then you might be starting from scratch when you do that, meaning that you won't have any reviews and you won't have that guest data as far as email addresses, etc.
If you are going to go this route to begin with, ask those questions and understand what does it look like if it doesn't work out and you want to change how your property is managed in a year or two.
Option #2: Modern Property Management
This is it's really a twist on the traditional model in the sense that these companies aren't necessarily locally based.
They are remotely managing a large portion of it, but then they have on the ground services in your area, depending on what company you go with.
The key players in this space include Evolve, Vacasa and Turnkey and each one of these has a unique business model with different services. Evolve is really more on the front end than anything else and then you will be responsible for the on the ground services. Turnkey and Vacasa have more on the ground services, and the price goes up for those companies because of that. You would just have to evaluate what exactly you're looking at to take over and then decide which company is the best fit for you.
The prices here range from 10% on the lowest end with Evolve since they're really just doing the front-end and you're still having to do a big portion of it on the back end. Vacasa and Turnkey are a little bit higher and prices range from 20-30% of rental income for those options.
The pros of going with one of these companies is that these are companies that really focus on technology and marketing and so they have set up thousands of listings and they have a great process that will get you listed and also getting listed on multiple booking sites all at once.
Because of the technology that they have in place, they can really get that going for you quickly. So, that is a major pro if you want to just get up and running and have some solid marketing right out of the gate.
The drawback here could be that it's not as full service as you need,depending on which company you go with. So again, you want to look into each of these and evaluate what works best for you.
And something to keep in mind just like the traditional company route is that you will want to inquire about, if this doesn't work out, what happens when I want to move my listing elsewhere? You'll want to find out what happens to the reviews. Will those transfer over and do you get any of the guest data like email addresses? So same thing with the traditional company. You want to check on that.
Option #3: Self-Manage
Self-manage is the option that we have chosen for our rental property and the option that most of the homeowners I work with have chosen as well. This means essentially you are the booking manager, you're responsible for the calendar, the marketing, the cleaning, the property management. All of it really will fall on you as the main point of contact.
This could mean that you are the person doing all of these tasks or you are deciding which pieces of this you are going to hire out. One question I get asked quite often is, can I choose the self-managed route if I live remotely? And the answer absolutely is yes, and I work with many homeowners that manage it this way. The key to this is just that you have established local contacts that you can trust that can be your eyes and ears for your property.
The pros with this option of course, is that you have full control over your property. You have control on how you market it and where you market it, your messaging, marketing, the tone that you set with your guests and how you communicate with them. All of that is fully under your control, which is really the reason why many homeowners choose this option.
Now, the drawback is also that you are fully responsible for everything, so that means that you will have to make sure you know exactly how all of the pieces are going to get accomplished and it also in a lot of cases means you are in the main point of contact, regardless of what time it is.
That is something that you will want to evaluate is are you okay with that and if not, maybe you can hire out pieces of that. You have someone to manage the inquiries piece of it, but you'll want to keep that in mind if you're deciding to go the self-managed route.
If you're going the self-manage route, it's imperative that you have systems and a marketing plan to get your listing seen and booked. I have a free vacation rental marketing guide for you that will walk you through the 7 most important steps that you want to focus on when you are first getting listed.
You have plenty of great options to choose from when you're first getting started with a vacation rental on Airbnb or VRBO.
Evaluate what option is best for you based on what pieces of the business you want to run and your proximity to your rental property.
Let me know in the comments what option you are considering for your vacation rental property management.