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When & How to Hire (or Fire) a Property Manager.

By William May
Published: 12/06/04 Topics: Comments: 0

This newsletter spends a lot of time discussing issues helpful to self-managed owners. However, the majority of vacation rental owners seek the aid of professional management firms to manage their homes. So today lets spend time explaining how to pick a good manager and, if necessary, fire a bad one.

WHY A MANAGER
After the thrill of managing all aspects of a vacation rental home wears off, some owners realize that renting may not be as profitable as they anticipated. Other owners, mindful of the value of their time, start with, or stay with, professional managers for the long haul. And it is the correct decision for the great majority of owners.

Managers can often advertise more efficiently and less expensively than individual owners. They have reliable on-site cleaners and maintenance people. In some circumstances an on-site front desk is provided. Venerable and experienced managers can have extensive lists of past guests to solicit to fill homes. Perhaps most importantly, managers agree to take those late night phone calls and shoulder the burden for each and every home they manage. It's a time consuming job, and it's not easy.

WHICH MANAGER
Not all managers are created equal. In fact, becoming a manager is far too easy; most managers don't even own real estate. Starting an agency takes less capital than buying even a single home. Some managers have humble beginnings as cleaners or handymen without training in other disciplines. Even those who are proficient at operations usually have far too little marketing experience. Granted, some can become good at it over time. And importantly, all have to become very good telephone sales clerks and great at customer service if they desire to remain in business.

HOW TO CHOOSE
When searching for a manager, it is of utmost importance to find one who will maintain and protect your home. When handing off-management, owners are trading away daily micromanagement for the elimination of headaches. After all things are considered, the primary goal of each owner is find a manager who they think will produce the HIGHEST NET INCOME for them year after year.

Unfortunately, there is no way for owner or manager to predict the income for a given home, even if it has an established and long rental history. Most managers are (or should be) reluctant to predict the future. Things change over time. The economy rises and falls. Certain areas become more or less profitable. Homes can be upgraded, or they can decline.

WHAT TO LOOK FOR
What is the unassuming owner to do? How should they go about picking from various managers? How are they to know which will produce the greatest financial return? How can they find a manager whom they respect and who will work closely with them? These are difficult questions and unfortunately, there is no easy answer. But we have developed a long list of questions owners can ask in an attempt to evaluate which manager will produce success. Every manager should possess these features if they purport to be able to make you money.

OPERATIONS
- Do they employ onsite supervisors to protect your property?
- Do they have their own housekeeping services to control quality?
- Do they have on-site maintenance services for quick repairs & maintenance?
- Do they have 24 hour telephone operator to handle those late night problems?
- Do they use redundant key access for easy but secure access?
- Do they have on-call plumbers, HVAC, etc.?
- Do they telephone guests upon check-in for pleasant customer service?
- Do they telephone upon checkout for instant turnaround?
- Do they post rules and notices to remind guests about compliance?
- Do they check inventory to minimize losses?
- Do they handle unit stocking if you don't want to?

MARKETING
- Do they employ relentless and inexorable advertising to search for leads?
- Do they use an on-line booking system for instant guest bookings?
- Do they have area websites for guests seeking specific places?
- Do they create specific, customized, property websites, complete with photos?
- Do they use a unique domain name for every unit to promote individual properties?
- Do they post individual calendars for each unit to maximize occupancy?
- Do they post floor plans for each property to fully inform guests of what they're booking?
- Do they employ unique and creative marketing techniques to find the most leads?
- Do they advertise on specialized websites to find the unusual visitor?
- Do they use feeder website listings to cast a wide net for leads?
- Do they use out-bound telemarketing to reach each and every guest repeatedly?
- Do they create a selling sheet for each property that clarifies its features and benefits?
- Do they utilize customized rates for each property to maximize income?
- Do they scan competitors pricing to remain at or above market rates?

SALES
- Do they specialize in short-term rentals - not sales? (R.E. Brokers who also do rentals get distracted.)
- Do they have a highly experienced sales team to garner more orders?
- Do they have professional sales managers pushing for maximum income?
- Do they manage rates actively? (Raise when possible, lower when necessary?)
- Do they use sales force automation software to speed communication?
- Do they use an automated booking system to reduce errors?
- Do they conduct first-day interviews to forestall complaints?
- Do they ask for after-stay evaluations to get guest feedback?
- Do they conduct constant sales training to keep all staff up to date?

ACCOUNTING
- Do they accepts credit cards to get all possible bookings?
- Do they collect & remit guest taxes to save the owner time and confusion?
- Do they charge cleaning to Guests rather than Owners to improve the bottom line?
- Do they charge significant deposits to avoid cancellations and write offs?
- Do they charge reservations fees to offset credit card fees?
- Will they process and disburse operating expenses if the owner so desires?

COMPUTER SYSTEMS
- Do they have an efficient rental management software system to maximize unit use?
- Do they have a way to quickly retrieve guest information to assist operations?
- Do they have fully networked computers for paramount staff coordination?
- Do they have a network firewall to guarantee your information is secure?
- Do they host their own websites for safety & redundancy?
- Is their system reliably backed up to stabilize their operation?
- Do they have the ability for off-site data retrieval to assist management?

OWNER SERVICES
- Do they coordinate details well with owners?
- Do they give full owner accountability to get answers when needed?
- Do owners get on-line access for easy owner inquiry?
- Do they maximize gross income by increasing occupancy & rates?
- Do they provide owner housekeeping when asked?
- Do they provide thorough & detailed owner income reports for full disclosure?
- Do they issue income reports monthly rather than quarterly?
- Do they pay out owner checks monthly?
- Do they offer status reports on request?
- Do they offer hassle free ownership with no headaches for owners?
- Do they offer competitive or even below market rental fees to increases owner nets?

GUEST POLICIES
- Do they have centralized reservations to make it easy for guests to buy?
- Do they utilize guest qualification to weed out trouble makers?
- Do they have tight group rules to avoid group problems?
- Do they insist on strong guest contracts to charge for damages and penalize errors?
- Do they have a no-cancellation policy to cut losses?
- Do they offer a re-sale policy to assist guests without penalizing owners?
- Do they use multi-marketing initiatives?
- Do they have a 24 hour operator for guest customer service?
- Do they have on-site supervisors to watch homes like a hawk?

STAFFING
- Do they have many years of business experience making them stable & reliable?
- Are they experts in the extreme detail required of vacation rental management?
- Are they experts at marketing and sales to get you the most income?
- Do the firm's owners oversee each property personally?
- Do they belong to and support Vacation Rental associations to keep on top of trends?
- Do they accomplish high occupancy as one of the income tools?
- Are they fully staffed and open extended hours?
- Do they have sufficient staff redundancy to be fully staffed at all times?
- Is the staff well compensated to provide continuity and allegiance?
- Is the company reliable and dependable?
- Do they utilize an explicit and clear management agreement?
- Do they offer a full service program for owners?
- Do they also allow limited services (Reservations or Referrals) if owners want that?
- Do employees share in earnings to keep them motivated?

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INPUT
As always, I seek your input. Please share your tips, techniques, compliments and complaints on this or any other subject by writing me at Director@VROA.orgDirector@VROA.org

HOME OF THE WEEK
We're off to Montefioralle, Italy this issue to see Elena Bencivenni's four-home farm conclave just 25 kilometers from Florence. I think you could relax there. (Especially after a glass of Chianti or San Giovese from their private vineyards.)
If you read Italian take a look at (montefili.it)montefili.it. To see the site in English click the small Union Jack in the bottom left corner.
(If you want your place considered for Home of the Week, please drop me an e-mail.)

FEEDBACK:
Wow! Thank you so very much for your newsletters!!! You provide a wealth of information. I love to read all of them!
- Stephanie & Robert

Ah shucks. That's so nice. We have some surprises coming in upcoming newsletter. Stay tuned. I think you'll like it.
- Wm. May

Author: William May – Volunteer, Vacation Rental Association
Blog #: 0053 – 12/06/04

Comments: 0

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