Monday, October 08, 2007

Selecting a Property Management Company

Now you have purchased your vacation home and you have decided to rent it out on a short term basis, you need help making this happen. If you are not living in Orlando, you will most likely want to hire a property management company to take care of the details for you.

Many property management companies will do everything or alacarte services.

There are many property management companies with a mix of good and bad ones. You initially want to consider how professional they are, how quickly they answering your inquires, and how knowledgeable about their business. You will want to briefly interview them and request a copy of their management agreements. The management agreements will spell out their services and fees, and if you want to add something or modify the agreement, most companies are agreeable. What the management agreements do not document is their process of getting bookings, managing your money, communications with the owner, how they handle repairs, some are silent on what income the owner gets, minimum required furnishings, so you will want to inquire about these.

These companies will do everything from marketing the property for you, handling reservation/guest check in, guest inquiries, arranging emergency requests, arranging maintenance & repairs of your unit, paying bills on your behalf, collect your income and provide payments and reports. They typically charge a monthly management fee for these services.

There will be initial start up costs guessing around $300-500 that will cover expenses such as obtaining proper licenses, changing locks, adding lock box for keys, making sure it is fire code ready (with working extinguishers & fire exit signs etc). Licensing takes 4 to 6 weeks.

After you select a property management company they will do a “walk through” of the property to make sure you have the minimum required furnishings, such as towels, dishes, TV etc. They may make additional suggestions to make your property more marketable, such adding a TV’s certain rooms, DVD player, or having wireless access (wireless access is in more demand in these rentals) for example.

Escrow money is required by companies in order to pay bills and/or repair items on your behalf. If you decide to pay your own utilities bills, then escrow amounts will change. In order for them to arrange for licenses and make payments on your behalf they will have you sign a Power of Attorney so they can handle dealing with vendors on your behalf.

Most all of the companies have a website that market directly to the consumer, and have partner websites in other countries such as Canada & UK. Most all of them have relationships with travel agents and tour operators to book rooms. The overnight rate & commission rate to the management company will vary depending who rents your unit. You will receive either a percentage of what the management company receives or flat rate based on nightly rate. Nightly rates also fluctuates based on high season vs. low season.

Many property management companies schedule to meet with your or telephone interview to discuss their services more in depth.

For more information buying a vacation home, please contact