How to Protect Your Investment Property Against Unethical Property Managers
Just yesterday, I met with a couple who owns a vacation home, and just hearing their story makes my blood boil.
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There is an old saying, “One bad apple spoils the bunch.” Well, one bad property manager can spoil people’s opinions about a whole industry of people. This young couple bought a vacation home 2 years ago to enjoy while their children were still very small. The property manager promised to rent their property out for them, but every time he called them, he was asking for money. He blamed the bad economy, lack of amenities in the unit, newer properties renting their houses for less, etc. as just some of the reasons why this house had never rented.
While visiting his vacation home, the owner was contemplating taking it off the short term rental market and just using it for him and his family; after all, he would save money since the property manager was never renting it out. This is where the story gets interesting. The next day the owner of the property asked a guy who was renting long term next door what he thought about him taking it off the rental pool.
The guy who lived next door was shocked, saying that the unit had guests in it all the time; he thought the owner was making a killing by owning the property. The owner laughed and said he the property manager has told him there were never any bookings in the house. The owner’s next step was to call the local utility company and ask for a history of the utility usage on the property (now, even though he owned the property, the account was not in his name so this was not that easy to obtain). He was shocked to see that the electric bill did in fact show the property was booked all the time.
Now, this is the most blatant case I have ever seen of a property manager not reporting bookings to a homeowner. Most of the time an unethical property manager will skim a booking or two here and there. In this article I would like to show you some ways you can make sure you are getting paid for all the bookings going into your vacation home.
5 Clever Tips to Protect Against Unethical Property Managers
Pay Your Own Utility Bills
This sounds simple, but your monthly utility usage should go hand in hand with your online booking calendar. After all, when guests are staying in your house, the electrical usage should go up. This is a very easy check and balance to put in place.
There are many lock boxes on the market that have wifi capabilities. These lock boxes allow the owners of the vacation home to change the lock box codes all the time, and they also have the ability to send a usage report to the homeowner on a weekly or daily basis. If the lock box is being used all the time, then the owner knows someone is staying in the property. These lock boxes can be purchased for around $350 to $500.
We recommend all owners set out a guest book on the kitchen counter. In here the owners should have a picture of their family and explain how much fun and pride they take in owning their vacation home. They should also wish the renters a good time and share their experience here in the book.
The book pages should be labeled at the bottom (1, 2,3, etc) so if a page is ripped out, the owner will know about it. This serves 2 purposes: 1) the owner can ensure the property is being well taken care of 2) the owner can ensure he is getting paid for guest bookings.
ADT, NCA, and other alarm companies can install a security system for around $30 a month that can send reports as to when doors and windows are open. This is a great way to track who is coming and going out of your vacation home, plus guests love the extra peace of mind that a security system allows them to have.
Get to Know Your Neighbors
You should get to know your vacation home neighbors, especially if they stay at their property all the time. Let them know that you live out of town, and ask them to keep an eye on your property for you. Remember these friends during holiday times by sending them a small gift and take them out to eat while you are in town. These neighbors will give you the best insight as to what is going on with your property.
There are literally hundreds of ways to make sure a property manager is not sliding a booking into to your house without compensating you for it, but these ideas are all low cost and low maintenance ideas. As long as you have safeguards in place, an unethical property manager will probably not mess with you. I welcome all comments below letting me know how you ensure you get paid for all the bookings staying in your vacation home.
What are your best tips for making sure property managers don’t take advantage of your rental?
Leave a comment below!