As an owner of a vacation rental property, the question of whether or not to hire a property manager or property management company is an important one. The responsibilities and duties of owning a short-term rental property are many, and hiring a professional can help simplify your day-to-day. You’re essentially outsourcing the operation of your vacation rentals. In this article, we look at some factors that you might want to consider when assessing if hands-off vacation rental management is right for you.
What does a property manager do?
Before deciding if you need to hire a vacation rental property manager, it would be helpful to understand what this type of professional does. Some of the most popular services offered by vacation rental management companies include:
Setting the right rental rates: performing market research to find out what similar properties are priced at. Management companies also have licenses for dynamic pricing applications that harness big data and AI to come up with the best price/occupancy ratio.
Marketing your property: the manager will first take high-quality pictures and write a compelling listing for Airbnb, Vrbo, Booking.com and HomeToGo. With a property management platform, your manager will list the properties on all those sites simultaneously. Your manager might even use a channel manager to increase the number of niche platforms your properties are advertised on.
Creating a direct booking site: odds are, your properties will also be listed on the vacation rental management company’s website so that guests who use Google can book directly. This won’t affect your bottom line, but it’s a way for the manager to further reduce vacancy rates, and create long-term repeat guests.
Screening for high-quality guests: your manager will likely use automated guest screening software. This is to make sure that no one uses your property for fraud or criminal activities.
Managing maintenance and repairs: this service is optional. Some companies offer it, others don’t. But maintenance will ensure that everything is working in tip-top shape. An important point to remember is that it’ll be the vacation rental management company that will handle the call when a guest will inevitably clog the toilet at midnight. (we have certainly been there lol)
Curating a 5-star experience: some companies include in their fees the guest experience. The manager will provide guidebooks, recommendations, and upsells for the guest when they are in the rental.
You should hire a vacation rental property management company if…
Knowing what a vacation rental management company does, we can now look at the benefits most get from outsourcing the operations of their rentals to a third-party. The most common reasons for hiring a management company tend to center around the following considerations:
- You own multiple vacation rental properties. Self-hosting is costing you time which you can’t or don’t want to dedicate.
- You live far from your vacation rental properties and are unable to tend to quality-control (assuming you already outsource cleaning and turnover)
- You have a hard time with marketing, and may even struggle with finding the right price vs occupancy rate
- Your financing has enough leeway that you can afford to lose a % of your vacation rental revenue in management fees
This isn’t an all-or-nothing list. Some owners have one of the points, while others all of them. It really depends on your current situation.
Outsourcing vacation rental property management isn’t for you if…
Now let’s look at some key considerations that make this sort of service not a great idea if:
- You want to scale your Airbnb/Vrbo empire in the next 1-5 years
- You are comfortable learning new software and skills
- You have a basic understanding of marketing your vacation rentals at scale
- You live close by to your rental properties and can do the final quality control (or have found a reliable way to outsource this)
- You have a hard time seeing someone else make major decisions over your investment properties
- You have a small portfolio (under 5 properties) and have time to manage them
