Running a short-term rental program for your vacation home or condo can be challenging on your own.
Hiring a property manager can have many benefits, but the first step is finding the right person to hire. Take a look at these 4 simple tips to help you find the right person for the job.
Download Your FREE copy of ‘How to Rent Your House!’
Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.
1) Choose a Property Manager You Can Trust
This may seem like common sense, but remember that if, like most vacation home owners, you don’t live near your property, trustworthiness is even more important. There are 3 main ways you can look for the best property manager around:
1. Look around the community. Identify homes in the area that are well kept and contact the owners to find out which property manager they use.
2. Talk to the HOA Board Members. Contact board members and ask them who they’ve had good experiences with.
3. Talk to a 24-hour guard. If your property has a guard, then they’re the ones to ask. They often have a better idea of what goes on day-to-day than anyone. They’ll likely have recommendations on property managers, and these recommendations should be taken seriously.
2) Don’t Hire the First Property Manager You Talk To
Ideally you’ll talk to at least 3 property managers before you settle on one. Include these questions among those you ask them:
a) Who is ultimately in charge? The ideal answer form the business owner is that they are always the one to take responsibility for the property. Even if their employees make a mistake, the owner should take full responsibility. That said, they should have a plan in place that includes check and balances and ensures your home is kept in great shape at all times.
b) What’s your cleaning and repair plan? Your home must be clean every time a guest arrives, and this should be one of the most important priorities for the property manager you hire. Ask for a detailed plan that describes their cleaning protocol and what they do to ensure it’s followed before every guest arrives. Speak to them about how repairs are handled. For example, for our Orlando properties we take care of any repairs under $100 and bill the owner, while anything over $100 gets the owners approval before we move forward. Remember that a vacation home is a business and expenditures should be in line with revenue.
c) Who would you recommend we hire? Of course they’ll say they’re the best property manager for the job, but they should also be willing to give you the names of 2 or 3 other companies they would recommend. Pay close attention to the answer: if every company you interview recommends XYZ Property Management, then you’ll know they’re someone worth contacting. As a property manager myself, I don’t hesitate to recommend other companies. I’m confident enough in my staff and the services we offer that I know even if potential customers check out other companies, they’ll come back to us when it’s time to sign on the dotted line.
3) Make Sure You Have Checks and Balances in Place
You’ll find that most property managers will suggest paying your monthly bills.
This makes it easier for them because they won’t have to worry about the utilities being cut off in the middle of the night due to non-payment. However, it isn’t to your benefit: they’ll expect $1,500 – $2,500 in escrow to handle these expenses. If you decide to move on to another property management company, you’re not necessarily going to get all that money back. As a result, it makes more sense to pay your own bills and refuse putting money in escrow.
Paying your own bills also gives you an added level of checks and balances. Every month you can check your utility bills to be sure that spikes in use coincide with nights you were paid for guests. If there are spikes when the property manager says no one was in the property, then this may mean they’ve rented the unit without paying you. They only need to do this a single time for it to make an impact on your profit / loss statement for the year.
4) Commit to a Short-Term Agreement at First
Start off with a 3-month agreement.
If it works out well, then you can resign for another 3 – 6 months. Short-term agreements keep your property manager on their toes and ensure you get the best service possible.
Would you add anything to this list?
Be sure to leave your comments below!