Vacation rental management companies have been expanding since the downfall of COVID-19 because, after then, more people have been traveling internationally than ever before, which ultimately boosted the demand for the vacation rental management business.
Short-term rental platforms like Airbnb, Vrbo, and Booking.com have simplified the rental property business. Host list their properties on these platforms and earn passive income through commissions and fees. However, fees vary from platform to platform.
What Is Vacation Rental Property Management?
Vacation rental property managers are in charge of various day-to-day tasks that contribute to the success of a short-term rental business and guests’ satisfaction. Hence the term “vacation rental management” refers to the oversight and management of vacation rental properties, including the management of reservations, housekeeping, repairs, advertising, and guest satisfaction.
Role of Vacation Rentals Property Manager
To be a vacation rental property manager, you can own a property without a property. You can manage the properties without investing.
A property manager’s role entails many responsibilities, such as handling guest queries, and bookings, researching rental prices, and setting up booking arrangements. Along with monitoring arrivals and departures of guests, payments, restocking supplies, housekeeping, property promotion, and several other responsibilities, a property manager will also be responsible for handling charges, reloading supplies, housekeeping, and marketing the property to potential customers.
Self-Management Vs. Hiring Vacation Rental Property Manager
Hiring a third-party manager or management company and doing everything yourself are viable options for those in the vacation rental business.
Since self-management of your rental properties has several advantages, including lower costs and greater control over your properties. However, many people still intend to hire property management companies, especially if they own vacation rental properties, because bookings are more frequent in this situation, which doubles the responsibility, such as time consumption and managing a wide variety of tasks.
Full-service vacation rental management is suitable for people who would instead not take on the roles of plumber, maid, and troubleshooter. They are well aware of different software which should be used for better productivity and management, as all the problems and difficulties of managing a successful vacation rental are taken care of by their rental property manager.
Rental property managers also maximize the business scale as they are experienced and know the strategies of this market. They create a business plan outlining their operations and the outcomes they hope to achieve. Plus, they build a good rapport with guests and contractors such as housekeeping and restoration companies.
They will advertise the place, respond to guest inquiries, and clean up after each stay. While on the other hand, property owners have to deal with one bill, one point of contact, and one firm that is committed to the success of their home in every way, rather than dealing with multiple vendors for different services like advertising or housekeeping.
Vacation Rental Property Fees – Income Source for Owner and Property Manager
Managing vacation rentals is a vital part of a hosting strategy that works. Good management of vacation rentals can bring in more guests and help the rental business grow. Vacasa says that vacation rental managers and management firms can save up to 30 hours monthly on routine business tasks. There is no question that a vacation rental property needs to be well-run to succeed in the long run.
Vacation rental properties are a lucrative source for both owner and property manager. A property owner earns income by renting out their apartment, house, cottage, or villa to vacationers, and a property manager earns income by managing properties for a fee. Generally, there are three management fee structures: guaranteed income, fixed rate, and commission. This model of fees helps management company to earn passive income.
What is the Fee of Vacation Rental Management Companies?
The fee charged by a vacation rental management business can vary depending on various criteria, including the location of the rental (city, beach, mountain, etc.), the nature of the duties required, and the frequency of guests staying in. It’s also vital to consider the size and style of the rentals; more significant, fancier properties like luxury villas may require more hands-on administration than smaller, more basic properties like apartments.
Furthermore, the quality of the property owner (whether domestic or international) and the services provided by the property management company must be considered. In addition to these factors, the price structure of the management business should be considered, and a suitable dashboard should be utilized to track everything.
Property Management Fees VS Vacation Rental Management Fees
A property manager’s fee depends on how much responsibility they take on. For a single-family home, the monthly fee is usually between 8% and 10% of the rent; flat fees are uncommon. On the other hand, property management fees for vacation rentals typically range from 10% to 50%. The range can also depend on the company and owner’s standards.
The Career of Vacation Rental Property Management
Short-term rentals have been booming for quite a while now, and it is expected to continue. Thanks to short-term rental platforms like Airbnb, Vrbo, and Booking.com, hosts now have an easier way to start vacation rental businesses.
Even though the COVID-19 pandemic has harmed the travel industry because many countries have stopped international travel, the industry remains very much alive. People still travel within their own country since they aren’t traveling internationally as much.
There’s been a big push from international travelers since 2021, especially those sick from staying at home. Being a manager of a vacation rental property can still be an excellent way to make money, as the travel industry is on the rise.
Vacation Rental Manager – The Right Career Path?
Booking and overseeing vacation rentals is not for a fraidy-cat job. So, before deciding if being a property manager is the right career path for you, consider the following traits:
- Multitasking ability
- Time management skills.
- Problem-solving skills and flexibility.
- Managing people and overseeing tasks.
- Ability to use different simple dashboards, such as Prempoint, as you might have to manage multiple properties simultaneously.
- Enthusiastic about learning new skills and knowledge.
- An excellent communicator is essential since you must establish good relationships with your guests to ensure a great guest experience during their stay.
- Your competitors will be a constant concern, as well as vacation rentals.
- As a vacation rental manager, you should be willing to implement new management strategies and adapt to rapidly changing market trends.
A career in vacation rental management requires time to become certified as a property manager. The following should therefore be your first consideration;
- Your state’s property management laws.
- Obtain top legal education programs and credentials.
- To achieve legal certification, a certain amount of time is needed.
- In your role as a manager of vacation rental properties, you should have long-term objectives.
Starting a Vacation Rental Property Management Company
Your vacation rental property management company can be successfully started once you gain experience as a property manager. Creating a property management company requires a lot of preparation. The following are some of the most critical areas to cover when starting a business:
- Choosing your business’s legal structure.
- Establishing your business goals and creating your business plan.
- Obtaining the necessary licenses.
- Choosing the right tools and software.
- Choosing and setting up your office space.
- Marketing your business through the creation of a website.
How to become a leading vacation rental management company?
To succeed in the vacation rental industry, you need to implement these key strategies:
Education and Knowledge – Key to Success
To achieve similar results, analyze what has already worked. Studying successful case studies in the vacation rental property management industry is crucial to success in the industry. Learn to use an efficient website to manage your properties, such as Prempoint, and social media to start your business awareness program.
Upon becoming acquainted with someone, you may inquire about typical challenges and how they were overcome. Learning from the mistakes and responses of others will enable you to overcome any difficulties or roadblocks you may encounter.
Stay Abreast With Trends
In the short-term rental market, trends may appear suddenly due to its rapid growth. Maintaining your position in the industry requires staying updated on marketing and business trends.
Without this, customers may seek out more innovative and informed businesses elsewhere. An excellent way to keep up-to-date on the ever-evolving state of the vacation rental management market is to subscribe to industry-specific YouTube channels and read property management blogs.
Keep an Eye Out For Fresh Chances
Growing as a property manager requires constant exploration. Advertising your business and attracting new clients requires you to be constantly on the lookout for novel approaches. Look at what other companies in your industry are doing online, and consider how you can replicate their success.
Multiply Your Earnings
There are many different avenues to multiply your earnings. To begin, you can include additional services within the price range. You can offer client hunting and extra online promotion. Secondly, reduce your fees during the off-season to get more opportunities. It will help you during the peak of the season as property owners will come to you by themselves because of the level of service you have already provided them, and at this time, you can charge according to your will and the market rate.
Furthermore, continue to promote your service across all social media platforms and make an effort to secure the services of a competent SEO content writer and photographer. You can earn extra money by asking your previous customers for testimonials and reviews. Testimonials play an essential role in making extra money.
Most importantly, try to use an efficient and reliable dashboard for managing all the properties, such as Prempoint, as being a vacation rental manager, you’re not limited to one property.
Advantages and Disadvantages Of Owning A Vacation Rental Management Company
As with anything in this world, this rental property management business also has its pros and cons. let’s look at it to get better insight into this market.
Pros Of Owning A Vacation Rental Management Company
Earn Extra Income
One of the most attractive features of a rental property management business is the possibility of earning more. Where you provide your services and the kind of house you manage will significantly impact your financial stability. Take a look at local listing sites like Airbnb to get an idea of what to charge. Vacation rentals are an excellent option for hosting smaller, more intimate social events, so don’t discount this demographic.
Flexibility
Real estate is a lucrative stream to jump in, and earning it requires investment. But in this real estate domain, a property manager doesn’t have to invest anything except time and effort. You can choose the owner you want to work with, plus at what time of day you wish to work. Plus, you have flexible working hours as you may advertise when you want to work.
Easy Marketing Opportunities
Many of these services, like Airbnb and VRBO, will employ property managers independently. In addition, you can expand your exposure to a more pertinent audience by using social media. Getting the word out about your business would be best by using location tagging and hashtags and asking guests and property owners to post reviews.
Cons Of Owning A Vacation Rental Management Company
Time-Consuming Business
Responding to routine maintenance and repair requests can take considerable time. You will also need to prepare for every guest’s arrival in advance. It may range from fixing the toilet to the paint of the house.
It would help if you considered the time it takes to get to your vacation house.
Another critical but time-consuming activity is advertising your business. Initially, you need to post an advertisement online for you to be able to find owners. Then you may also have to scale the owner’s business.
Fee Vs Taxes And Additional Expenses
Besides federal taxes, you’ll likely have to pay taxes to the state, the city, and the county on top of your regular income. You’ll probably have to shell out more money for a business license if you need one to comply with local regulations. In addition, you should know that promoting your services online may include a booking fee.
If the expenses are too much, consider participating in a 103 exchange to sell your property strategically. This swap allows you to defer capital gains taxes and reinvest in a more suitable residence. It’s a wise strategy if you intend to reinvest in a more convenient location or keep a vacation property for personal use instead.
Inconsistent Earning
Unlike long-term tenants, they have no reliable source of income. It would help if you had a solid marketing plan, and you’ll have to invest more money into assembling the right marketing staff.
Vacation Rentals – Frequently Asked Questions
Which rental property business is better?
Vacation rentals increased 22% over hotels due to their tailored vacations. But you have to decide between long-term and short-term rentals. The benefits of long-term rentals include regular income and freedom from owning a business. At the same time, rentals for short-term periods can give you a higher revenue per night. Since you don’t have to buy a property to manage short-term rentals, you can handle any property. Rent arbitrage can also be considered.
Vacation rental management fees higher than property management fees – Is it true?
Yes, because vacation rental property has a lot of work than a rental property. Hence vacation rental management fees are higher than average property management fees. Besides fees, a host can earn through commissions also.
How vacation rental management differs from property management?
Vacation rental management is considered a short-term rental in which you must prioritize client satisfaction because holiday travelers book vacation rentals. At the same time, regular property management is different because most individuals rent for living, not vacation. And you need to spend less time on guest communication and marketing.
How do I manage my vacation rentals?
Rental property management on your own can save you money and provide you with more control. Managing vacation rentals is a time-consuming endeavor that requires multitasking, such as getting employed as a cleaning service and looking for reliable service providers for upkeep and communication with guests, which is compulsory. While on the other hand management team can function more efficiently with the support of business strategies and goals, as they are experts in this business.
Why does the owner hire a vacation rental property manager instead of managing himself?
The services of property management do not come for free. However, they will be okay with hiring them when they obtain several benefits in return, such as more free time for themselves and their families. Second, they won’t have to be responsible for looking after their properties because they will hire a single company. This company will now be responsible for everything from maintaining the property to interacting with customers. The experience of the managers will, in the end, give the owner some measure of peace of mind.
Conclusion
Hence owning a vacation rental property is a lot of work, but it can be quite rewarding if done by any good vacation rental property manager. Besides having a lot of flexibility in being a vacation property manager, you may also have a lucrative source of income. This may lessen the burden of a landlord and boost the income of both the partners (landlord and property manager).