Home Business Things You Should Consider Before Partnering with a Property Management Company

Things You Should Consider Before Partnering with a Property Management Company

by Tracy Finke

Industry experts, reveal the questions all hosts should be asking before signing up with a property management service.

You’ve worked hard, and you’ve finally invested in the second property you always dreamed of. Apart from the breaks that you’ll take each year—to turn off and recharge your batteries—and the occasional stays of family and friends, your new apartment is likely to stand empty for most of the year. What an opportunity, you think, to boost your income and make some real money.

You know that given your property’s great location and presentation, it lends itself ideally to short-term letting, taking advantage of the higher rates. But then again, managing a property is a lot of work—a lot of work.

The rise of Airbnb property management companies

Source: nuwireinvestor.com

Over the past decade, there has been an abundance of property management companies as UpperKey  emerged to support the short-term rental platforms. Rising off the back of Airbnb’s massive popularity, it’s easier than it’s ever been to rent an apartment, house or room directly from its owner, cutting costs, and taking control.

The same can be said for hosts. Once considered the real challenge when filling a property, advertising has become the simplest part of the process, with scores of platforms presenting each property to millions of hopeful guests each year.

The way we once arranged holidays, trips, and breaks has changed forever, and with it, a new market has opened for those too busy to take advantage of the full range of benefits on offer.

If you’re too busy, too far away, or just indifferent to the amount of effort it takes to run a short-stay let, a property management company is your dream alliance. Welcome to your one-stop partner to profit from your property.

Who should you partner with, and why?

There are a handful of basics that you’ll instinctively feel the moment you start to think of putting your pride and joy in someone else’s hands. Are they genuine? Will they love and care for your second home as you do? Will they rip you off wherever they can to turn a bigger profit for them and a smaller one for you?

Your gut is a great driver for carefully considering each possible partner, but hard data is better. Researching each of your ‘possibly’ property management partners is a must, so check all the avenues you have access to, looking for the red flags in every review, report, and communication.

Not all property management companies are created equal

Source: bermilton.com

It doesn’t matter how they tag themselves; whether they label themselves as a short-let management company, Airbnb property management, or even an Airbnb concierge, they add up to the same thing: someone to run your property for a percentage of the profits.

Their rates, services, how each communicate, the amount of work they’re prepared to take on and what they expect of you will vary from business to business and plan to plan. Look out for hidden costs, and when you’re carrying out your due diligence, make sure you stress that you need access to complete figures and possible fees.

The real benefits of employing a property management partner

As a leader in our field, we know that when it’s done well, there’s often more to gain for the client than they expect.

Most hosts expect to take a hit in income when their chosen company takes their cut of the profits. Well, if you partner with an experienced service, that’s not necessarily the case.

1. You could earn more than if you did the work yourself

Your new partner is a professional, one that’s worked within your location in the service industry for years. They hold all the information you don’t. They know how to maximize rates, how to fill the gaps in your calendar, have a portfolio of guests ready to go, and with technology in place to make the jobs you’d struggle with simple.

With that in mind, the income from your property they can achieve is far higher when left to the experts. So even after taking their cut, you can still come out with more cash in your pocket than if you’d done the job yourself.

2. You get access to their expertise, experience, and their tech

PropTech and iRenting are the industry buzzwords right now, and any property manager worth partnering with will be driving both of those at every opportunity.

By automating processes, simplifying old, outdated practices, and finding new digital methods to be more efficient means, your rentals will be quicker for your guests and easier for hosts. Of course, you couldn’t match the costs of implementing such services yourself, but your property manager has to—to keep up with the competition, keep costs down, and achieve the margins everyone needs.

From billing, payment, and smart-contracting, to remote tours, guest screening, and digital lockboxes, their tech is your tech. So now, who’s the smart operator?

The questions you should ask every property management company for real peace of mind

What do your services cost?

Source: pointpropertymanagement.co.nz

All fees must be transparent. It should include structures, additional service costs, any extras, how payment happens, when payment happens, and any possible reductions made to your final payment.

Are there fees for when the property is empty?

Most agencies take a percentage of your income. However, some will still expect some form of payment when there’s no income from which to take their share.

How do you handle damage and breakages?

Taking the hit for damage or repairs could significantly reduce your income if not covered by the deposit, insurance or your property management company’s practices.

How do you manage insurance, and what does it cover?

Source: versicherungsbuero-weiss.com

Insurance is a must, and you need cover for every eventuality.

What do your services include?

This is where digging into the tiers of service really counts. Each company will promise the earth yet may not deliver within the tier you decide on. Make sure that you’re going to get everything that’s promised for the cost you agree on.

How do you handle maintenance issues?

Some agents include maintenance and upkeep in your costs, as it’s in their interest to keep your apartment pristine at all times. Others will expect you to keep it in check and cover the cost.

Do you screen your guests?

Quality guests are crucial to healthy relationships with neighbors and the property’s condition. Screening is essential to place the kinds of guests you’re happy to have in your home.

What are your occupation rates for an apartment of the same location and quality?

Source: booking.com

Viewing recent data and relatable figures is a far better predictor for your hopeful income than a loose estimation from your new contact.

How do you communicate with guests, and what are your response times?

Customer experience and satisfaction stem from great communication. It’s also a good measure of efficiency and level of care.

Which platforms do you use to advertise?

With so many platforms available, it’s good to know where your property is listed. It can also help predict the type of guest you’ll attract.

How much advertising and marketing can I expect?

Source: marketingdonut.co.uk

Given most companies operate on a percentage, it’s in their interests to have a steady stream of guests for each property. However, if balancing figures means placing a cap on advertising and marketing, can you achieve the occupancy you expect?

Do you deliver commercial listings with professional photography?

You’ll get a far better response to your property with professionally written copy and photography. Likewise, digital tours should follow the same high-end format to attract the best possible guests.

How do you manage the decoration and upkeep of the apartment?

Source: veranda.com

Every guest will be thrilled with a freshly decorated property. In many high-end apartments, it’s almost expected. Will your new partner factor the costs for this into their budget?

How do you manage housekeeping and restocking supplies?

Is housekeeping outsourced or managed in-house? How are turnovers handled, and who’s in charge of maintaining the consumables inventory?

How do you manage checking in and out, and deposits?

Source: unsplash.com

Some partners insist on a personal meet and greet, yet more and more guests prefer to be left to their own devices. iRenting allows digital keys, keyboxes, and video guides to do the job in a simpler time-saving manner, saving on human resources and costs.