Vacation rental income isn’t as passive as it seems at first glance. Some vacation rental owners estimate they spend 30-40 hours a month managing their vacation rental. This time commitment increases with additional properties, and becomes even more complex if you’re located in a different area than your property.
For vacation rental owners wanting to earn income without taking on the responsibility of day-to-day management, there are professional property management companies (PPMs). There are PPMs that specialize specifically in short-term rentals and can ensure that your rental runs smoothly, while saving you time and effort.
What is a PPM?
Professional property management companies manage the daily tasks of running a short-term rental and utilize their tools and expertise to maximize your property’s profitability.
Some property management companies are full service, and others allow you to choose services a-la-carte. Most PPMs include services like:
- Advertising and promotion
- Reservations and booking
- Communication with guests
- Payment processing
- On-call support during the guest’s stay
- Cleaning services
- Maintenance & snow removal
Working with a property management company opens up access to expertise and resources that might otherwise be unavailable. These larger companies are able to dedicate money and resources towards advertising and marketing efforts that increase occupancy rates. PPMs also have established relationships with cleaning and maintenance professionals that are qualified to keep your rental spotless and handle repairs and renovations.
A professional property management company will help ensure that your rental is compliant with local regulations. Several cities (Denver, Los Angeles, Nashville, Washington DC, and others) require short-term rentals to be an owner’s primary residence. To expand into multiple properties, you must acquire a business license. Professional property managers take care of this red tape for you and manage your property under the banner (and with the resources) of their larger business.
Specialty and Location
Many property owners choose to work with a local PPM for the convenience and benefits of working with professionals who have experience in the local vacation rental landscape. Depending on your location, a local PPM may have specific knowledge pertaining to managing properties in your area (for example, the unique challenges and opportunities that come with managing ski condos or beach homes). A local company is also a quick call away for any issues or emergencies that your guests may have during their stay.
Services
Some PPMs offer full-service management, while others offer a suite of services from which you can select. Many property owners prefer to be completely hands-off and let their PPM manage everything relating to the rental property. Others choose more basic support, such as paying for reservation management and cleaning services but managing repairs and maintenance on their own. Hiring out some services and managing others yourself can help control cost.
Cost
There are costs associated with hiring an outside company to manage your vacation rental. You should expect to pay 10%-50% of your earnings to your PPM, depending on how many services they manage for you. Some PPMs charge a flat fee, but the majority base fees on a percentage of revenue from the property.
For vacation rental owners who want to gain income from their property without dealing with day-to-day management tasks, hiring a PPM is a great choice. Hosts who would rather be more hands-on and cost-efficient may prefer to manage their own property or use a property management system. Regardless of which path you choose, the Nofie Host Academy is filled with information to help you get started.