Hiring a property management company for a short-term rental can be a significant boost to an property owner’s lifestyle. You reap the financial benefits of owning an investment property without putting in all the work.
But like every service out there, there is no one size fits all and you have to choose the best fit. When it comes to short-term rentals, not all property management companies are the same. As you search for the best property management for your rental, you need to make sure you’re asking the important questions.
First, why hire a vacation rental manager or a property management company?
Whether or not you need a property management company for your vacation rental business depends a lot on your skills in property maintenance and management, the size of your portfolio, and the amount of time you have. Managing a vacation rental company .property requires a lot of skill, time, and effort. Without a property management company, you’ll need to handle all the things any landlord would handle such as offering a great guest experience, maintaining the property, doing the cleaning between check-ins, collecting fees, marketing and more.
Hiring a vacation rental management company will take all of that out of your hands and into the hands of people who are trained to do this type of thing easily for a living. Depending on the type of agreement you have with the vacation rental property management company, they could easily take on all of that plus more. You’ll be able to sit back and relax, manage your role remotely while sipping a pina colada on a beach somewhere in South East Asia. So if that image is quite compelling, then let’s discuss some questions that you need to ask before you onboard a vacation rental management company to do the work for you.
1. What services do you offer?
The property management company you choose depends significantly on which services are important to you. Some property managers will only handle the marketing of your vacation rental. Others will combine marketing with third-party maintenance and cleaning.
However, the most popular is full-service management. A full-service property manager will handle everything required for a successful investment property, including:
- Handling reservations from start to finish
- Regular maintenance and regular cleanings
- Revenue management and strategic pricing
- Generating and replying to guest reviews
- Responding to guest emergencies
- Taking professional-quality photos and writing a detailed description of your property
- Ensuring all your listings are updated constantly and consistently
If you plan to be very hands-on with your vacation rental, you may not need a full-service property manager. But managing a vacation rental successfully is a full-time job. If you don’t have the time or energy to invest in your rental, consider a full-service property manager that can handle the details for you.
2. Which technology platforms do you use?
The standard Airbnb or VRBO interfaces get the job done if you’re personally managing a handful of your own vacation properties. But when your portfolio grows past a certain point, these interfaces reach their limitations.
Now think of how many properties short-term rental management companies manage. We’re talking dozens (if not over a hundred) rentals. If they’re running it all via the standard interface, the odds of a mistake in bookings increases. That translates to bad guest experiences which leads to lower earnings for you.
Ask potential management companies what technology suite they use. They should use premium tools that allow them to centrally manage bookings across various sites, automate messages based on timelines or events (like a check-in) and maximize earnings through advanced analytics. High-end platforms like Hostfully even manage custom guidebooks tailored to each rental.
3. How long have you been in business and/or how many rentals do you manage?
This question can be tricky, especially in this market. Of course, you want to ask questions about the property management company’s experience in the industry. But just like any hired service, you don’t want your property to be the one the company makes its “learner’s mistakes” on.
However, bear in mind that the online vacation rental business is new and growing fast. Short-term rentals and management services in your area may not have existed a few years ago. So, if you find yourself in a new market, there may be some better ways to get the answers you need to be satisfied with them as a property management company for your vacation rental business. Some better-suited questions to consider can include:
- How many properties the company currently manages? And in your area? A management company may be new, but if the team manages dozens of properties around town, it’s a good sign.
- What is the average occupancy rate of their properties?
- Ask them about the types of properties they manage (commercial, residential, long-term, short-term, etc.)
- How long have they been in the business of managing properties?
- Some states require licensed property managers. If you live in one of those states, you’ll need to ask if they’re licensed.
- How many employees does the company have and exactly who within the company would be managing your property?
- What functions do they do as property managers and are they open to meeting other specific needs of the rental owner?
- What was their worst property management experience and how did they handle it?
- What makes them stand out from the competition?
The ultimate test, however, is to request referrals from current and previous owners. Unhappy clients will be quick to let you know to steer clear.
4. What fees do I need to be aware of?
Most property management companies work with one of two fee structures. Either they are commission-based, where they take a percentage of the rental revenue that comes in, or they offer a flat rate for their services.
Still, there will need to be specific questions about those fees. Here are some questions to consider when it comes to property management companies and their fees:
- Do initial fees cover advertising, marketing, and/or administrative processes?
- Are there any additional fees for running errands, handling maintenance calls, cleaning fees, etc?
- Is the fee based on gross or net?
- Will you send me receipts for bill payment and/or any maintenance issues?
- Who pays for credit card fees on guest bookings?
- What’s not included in the management fee? This will help you prepare for any surprise expenses that can pop up later.
- What improvements do they foresee you needing and how much should you budget for those improvements?
- Do they submit occupancy taxes on behalf of the owners of the properties they manage? If so, is there a fee to submit that?
- Will you, as the property owner, be added as an additional insured on their property management insurance?
- Is there a penalty for terminating the agreement early?
- Will you be receiving monthly statements from them?
5. Operations, cleaning, inspections and upkeep.
When you can’t be around to keep an eye on your property, you trust your property manager to make sure everything is running smoothly before, during, and after bookings. That means the tense moment you open the door to see if everything is still standing after the guests are gone is done by someone else. But is it done right?
There will definitely be questions you will want to field their way. Some questions to consider for this can be:
- Do they send someone for an inspection right after the guests leave and before the property gets cleaned?
- Is there a checklist tailored for the individual property the company uses for every inspection?
- Who handles the cleaning? Do they have a quality assurance process in place?
- Do the cleaners have on-site laundry options or do you use an external service?
- Do you discuss maintenance issues with us first before proceeding to make any decisions? What will the company repair on its own without your involvement? The last thing you want is a manager calling you every few days to get your permission to change a lightbulb.
- How will the landscaping be maintained? How about pool maintenance?
- How do you screen incoming guests?
- Do you have technology in place to prevent/catch parties or large events/gatherings before they happen?
- How will they handle the check-in process? Will they be there for a walkthrough?
- How will they handle emergencies on the property? With guests, maintenance, or otherwise?
- What do your average guest reviews say? What is your average star rating (happy guests)?
- How do you improve the guest experience compared to an owner?
Finally, you want to make sure that a manager inspects the property after the final cleaning. A final inspection reduces guest complaints.
6. What about when the property is empty?
In the ideal world, your vacation rental would be booked all year long. However, this is typically not the case. So what happens when your vacation rental is empty during low season? What will the property management do to ensure that the home is not only safe but well maintained? How about the landscaping in case you have a garden? Will there be routine management checks to ensure the property is still in good condition?
In highly seasonal markets where vacancies are unavoidable (ie ski resort towns), ask how often the company will check up on the property.
7. What is your communication process with guests?
Your property manager should have a process and plan for receiving calls from guests. Most short-term rental companies will have a 24/7 number that guests can call for anything from an extra roll of toilet paper to requesting fresh towels. What’s important is the company’s average response time.
A quick response time doesn’t just translate to happy guests and better reviews. It could also mean limited damage to your property in case of an emergency like a leaky pipe or broken window.
8. How are bookings handled?
You want to make sure guests can book on their preferred system and can do so outside office hours. Otherwise, you’re losing potential revenue streams. The property management company you choose should have multiple ways for guests to reserve your home. There should also be a system in place for inquiries outside the major platforms like Airbnb and VRBO, as well as a dedication to quick and effective follow-ups.
Other questions to ask when it comes to the reservation process include:
- Can guests book online and use a credit card?
- How is this information kept safe?
- Can I market my house and accept my own bookings?
- How do I book my home for a personal visit?
9. How will you keep my vacation rental home and belongings safe?
The beautiful thing about owning a vacation rental is that you don’t have to live locally to be successful. But that also means you could be hours or days away from the property in the event of an emergency.
This is why you trust the property manager to have a system in place to ensure the safety of your home. Ask how often is the home checked when vacant? What are there plans in place to deter thieves?
10. What is the marketing plan?
You may have the greatest vacation rental on the block and the most attentive property manager, but if there is no marketing plan, then it’s all for nothing. So, you’ll want to make sure you ask the right questions to know they’re utilizing all their resources to find high-quality guests to enjoy your home and keep your rental calendar booked. Here are some great questions to start that conversation:
- What information will they need from you to market the property?
- What platforms and sites will the property be listed on (Airbnb, Vrbo, Booking.com, etc.)?
- Find out how they plan to market your rental to make a guaranteed rental income. Who will be taking the pictures and writing the description? Will there be a professional photographer? If so, who pays for that?
- How will they make sure your home stands out to potential guests?
- Which traditional and non-traditional marketing strategies do they plan to use?
- Will you be able to do direct bookings? What percentage of the bookings are direct versus through other channels? (Social media, email, Google Ads?
- Do you leave any welcome notes or gift baskets for guests? Anything special for return guests?
11. Do you have an owner’s portal where I can see everything?
You may have several things going through your head at any given time when it comes to your vacation rental business. There are things you always want to be up-to-speed on and you shouldn’t have to make calls multiple times throughout the day to learn what’s happening with your property.
There should be an easy way to check on bookings, commissions, etc., to know where everything stands. You need your peace of mind and a better sense of control over your investment. A good, professional property management company will have this information available through some type of portal service. Make sure to inquire about this type of service.
Wrapping this up
Selecting the right property management company is important. You’re trusting your vacation rental to someone else and that can be stressful. But by asking the right questions, you can better decide which company suits your property the best, and then you can go ahead and sign the management contract by having all the information you need to make a smart decision.