As an out of state rental property owner, I can relate some of pros and cons of hiring a property management company to oversee your investment and maximize revenue.
The first decision you will have to face , as an owner of rental property, is whether to self manage or hire a professional property management company. Some may see this as a no-brainer when faced with the property management fees you’ll encounter in the interview process. Generally for our area at the beach, the number will run from 20%-30% of Gross Revenues. This is revenue that could flow directly to the bottom line net for you as the owner. But at what expense? By this I mean the value of time…your time and the effort you have to expend to secure desirable rentals for your property.
Some owners would rather invest their time and effort to secure their own rentals via the web (VRBO.com, Homeaway.com, etc) and keep the proceeds from Gross Revenues flowing into their own pocket. What is the impact of this approach as it applies to you and your your time? In just about every case, the impact will be time consuming if you want to ensure you maximize your rental revenue flow.
The first item on your agenda will be to secure a marketing website using a popular vacation portal such as VRBO.com. This process includes stating the price of your rental adjusted for seasonality, the terms of the rental agreement, check-in/check-out times, photos, property description, etc. This process is time consuming during the initial registration of your property, then it’s just a matter of maintaining the website.
Next you have to locate a very dependable maintenance company for repair items that are the norm for rental properties. Changing air filters, light bulbs, running toilets, A/C issues, etc. When these issues arise, you must have a dependable company to ensure items are addressed in rapid fashion for your tenants. And you, as the self appointed property manager, will be the point of contact for any repair issues that may occur during the rental period. So be prepared to answer your phone at any time, day or night.
Securing desirable rentals is also very important. And by desirable, I’m referring to tenants that you would welcome back on an annual basis. These are the renters you will want staying in your home and you want to maintain contact to keep them coming back. This is where you have to learn the screening process to find the right tenants. And trust me, the spring breakers are not the clients you’re looking for when it comes to your property. Your screening process must be fine tuned and adhered to or you could find your phone ringing constantly with complaints about your tenants.
I’ll wrap this article with a recommendation based on my experience self managing and using a property manager. Having done both, I would always recommend the use of a professional property manager. They’ll have their own website, have an office staff to secure bookings and handle any issues or complaints. Maintain the property with contracted housekeepers and maintenance staff. They know the local market and will make sure you’re pricing is competitive when rentals may be slower than the norm. Books are maintained by the property manager where they handle all finances including rental income disbursement to the owner and filing of state and local bed taxes. And foremost, they are your eyes and ears at the beach, overseeing a very valuable asset…your beach house.
Mark Evans, REALTOR
mark@eimersgroup.com
850-837-8880 Office | 817-637-2453 Cell
