The 7 Questions To Ask When Engaging A Holiday Rental Management Company

So, you’re thinking about engaging a management company for your holiday rental.  Maybe you just purchased an investment property, or you’re exploring ways to make some extra income from your holiday home.  It could be your first time dealing with holiday rentals, or perhaps you haven’t had success with a property management company before.

A question you might be wondering is — why shouldn’t I just do this myself?

While there are many owners who handle management themselves, it can be incredibly time-consuming.  To do it properly, you will need to be prepared to promote your property, field guest enquiries, organise professional photos, write and continually update a high-converting listing, understand algorithms, answer questions about the property, vet potential guests, follow up booking leads to convert more sales, optimise the property for search, continually review the pricing to maximise profit, set minimum night stays, juggle on-the-ground services like cleaning and maintenance, and then follow up for reviews.

Do we still have you? 😊

Engaging the right management company for your property can take the stress, endless tasks and marketing responsibilities off your plate – and give you the time back.  But before you proceed, make sure to ask these seven questions to know you’re getting everything you need.

1. How is holiday rental performance in the area?

You’re looking for a company who has a good feel for the local market.  A great property manager will know the ins and outs of your location — season and event demands, competing rates, what is most popular in the area, and how local regulations and trends affect the market.

Ask questions and feel out their responses.  If they have strong answers to your questions, you’ve probably found a solid manager who spends a good amount of time thinking about how to help their clients succeed.  Be particularly wary if you know about regulations in the area that they don’t – every manager should be fully aware of the status of local short-term rental regulations.

Importantly, don’t base their experience on years in the business – there are quite a few long-time property managers out there who haven’t kept up with changes in the industry and don’t perform well as a result.

2. What are your fees and contract terms?

Many holiday rental management fees range from 20-25%, plus channel fees, which means in the end you could be losing anywhere between 30-40% of your rental income.

Before hiring a property manager, do the math to determine whether you can afford to pay their total fee and still meet your rental income goals.

Contracts are the biggest sticking point for owners who have wound up with a poor property manager.  If you figure out in the first two months that the manager isn’t doing their job well, but you’re locked in for a year-long contract, you’re going to be very unhappy for the remaining ten months of that year.  You’ll also want to know the payment terms and timing. Some companies can take months to pay and, if you’re caught in an unfavourable contract, it can be a long time until you receive your rental income.

If a company requires a contract, ask whether there are any flexible out-clauses based on performance or poor service where you are able to leave their management without a penalty.

Ultimately you should make sure any agreement helps you build a solid long-term relationship with your property manager and a holiday rental business which prioritises guest experience over short-term profit.

3. What services are included in your Management Fees?

You’re hiring a holiday rental management company for the high level of service they provide, so you will want to know exactly what is included in their fees.  Specifically ask whether the fee covers marketing, professional photography, specialist copywriting, continually updating the listing, observing market trends, cleaning, maintenance, pre-stay inspections, and in-person visits for any issues that might arise during a guest’s stay.

You should also ask about anything which is not included in their fee – for example, some property management companies will charge an additional fee if one of their employees has to visit the property outside of business hours.

Excellent guest support should definitely not cost more.

4. How do you market my property?

This is an important one – make sure you understand their potential marketing plan – including the professional photography and optimised copywriting of your listing, framing your rental for current trends and the market, and how your property is promoted through channels and social media.

Some holiday rental management companies prefer to market their clients’ properties only on their own website.  These days, that’s not enough.  No matter how popular a local manager’s site is, it is never going to get the same amount of traffic as major online listing sites like Airbnb, HomeAway or Booking.com.  If you’re not listed on as many major sites, holiday home portals, online booking agencies and meta-search aggregators as possible, you’ll be missing out on a lot of potential guests.

Listen for words like “appear high in the search results” or “search engine optimisation” – these are good indicators your manager has put effort into raising and maintaining the profiles of both their own website and that of your property online.

Your manager should also actively seek reviews and follow up with guests to see if they want to book again next year. Ask your manager what they do to ensure repeat business and 5-star reviews to entice new guests to come and stay at your property.

5. When and how are guests able to book my property?

Holiday rental managers aren’t awake around the clock (which is fine, because most guests aren’t either) but they should be available when people are likely to be making their travel plans – ie. before work, after work, and on weekends.

If your manager is only available to make bookings from 9-5 on weekdays, the odds are very high you’ll be missing out on bookings from people who work standard office jobs.  Believe it or not, the ideal response time for enquiries is 15 minutes, so the bar is already quite high when it comes to the level of service required to actively convert enquiries into bookings.  Many holiday rental management companies have a 24-hour rule of thumb for response times – if that’s the case, you can almost guarantee you’re going to be losing business to someone else who responds faster.

You should also ask how guess are able to book.  The majority of guests prefer to book online, instantly – not over the phone or where they have to wait for their booking to be accepted.  If your manager isn’t up to date with these preferences and the technology required to enable instant online bookings, again, you’ll miss out on business.

6. How can we be sure our holiday home will be looked after?

Be sure to ask your potential holiday rental manager how they handle issues like broken dishes or missing items after a guest’s stay.  You’re looking for a manager who organises a post-stay inspection after every guest departs.  They should take photos of any damages for your records, and ensure the property is brought back up to optimal condition before the next guest arrives.

Your property manager isn’t expected to pay for damages out of pocket – that cost will come from the guest’s deposit or a damage protection policy.  However, your manager should notice the damage, report it, and liaise with the guest about retaining their deposit to cover the damage if necessary.

7. Can I speak to some of your current clients?

Always ask to speak with a few existing clients prior to signing a contract.  Previous and current owners can share details about working with the property manager and exactly what to expect from your arrangement.  If a manager is reluctant to give you references or isn’t enthusiastic about current clients speaking about their experience, that’s a sign this company isn’t going to be a good fit for you.  You should be able to hear or read success stories from customers who can endorse the company’s reputation.

IT’S TIME TO RETHINK HOLIDAY RENTAL MANAGEMENT

The traditional models of holiday rental management are outdated.  As we’ve covered, doing it yourself is a lot of work.  And unfortunately, working with traditional property management companies can mean less control with fees that can be hard to justify.

But there’s a better way.  You don’t have to do it all yourself.  And you definitely do not have to sign with an underperforming or overpriced property manager who may have become complacent in terms of where the short-term rental market has moved.

Bookabreak.com.au is different.  After two decades in the real estate industry, we are reshaping holiday rental management by increasing performance through our unique pricing data metrics platform.  We provide the latest technology which evolves with consumer behaviour.  And we give homeowners tailored performance-focused marketing support.  Not only does our instant booking platform allow us to greatly outperform traditional property managers, our local network partners are vetted to the highest standard to handle everything from housekeeping and linen to maintenance.  We hire specialists to create search-topping property listings, promptly handle all enquiries, arrange on-the-ground services, execute bookings, issue pre-stay communications and follow up requests for online reviews.  Basically, our unique approach and five-star service ensures a relaxing holiday for both owners and guests!

We also offer an intelligent industry competitive fee structure which is unique to any of our competitors.  Click here to find out more about how we can help you.

Written by nab79 • November 25, 2019
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