Property Management vs. Self Manage?

[Matt J]

I talked with a neighbor two days ago who has been with a large local management co for several years now. He pocketed $4k all of last year. He's disgusted. Another neighbor who manages it directly brought in 8 times that amount without a single negative incident. I'm sure that's not always the norm but $28,000 add'l cashflow raises some eyebrows.

Management companys priorities lie in making a profit for themselves. Not the homeowner. If they average 3 booked months out of every year per property I'm guessing they would have a banner year. Do any management companies guarantee a specific number of bookings?

A good friend of mine uses another homeowner who guarantees a minimum 50% booking at full rental rates. She limits herself to just a handful properties all within Rosemary, Seacrest & Seagrove. She's been doing this for the last two years now and all the homeowners I've contacted are thrilled with her results. She handles all issues and sends them a check less her fee. Two of her properties sold and I'm considering taking her up on her services.

It raises my BS meter. Keep in mind that people will always lie about their finances. It also depends on the rental company. I know of one local company that used to have a business model designed on getting an owner to sign a year contract and then making money off of maintenance fees, regardless of how well the unit rented.

Again it comes back to the issue that Paula raised, how much of a headache are you as the owner willing to deal with?

 

[Kurt]

Management companys priorities lie in making a profit for themselves. Not the homeowner. If they average 3 booked months out of every year per property I'm guessing they would have a banner year. Do any management companies guarantee a specific number of bookings?

I think this is a bit extreme. A professional management company knows what is good for the owner is also good for them. There may be some that are not looking out for owners' best interests but they are not going to be successful in the long run - too much competition.

A good friend of mine uses another homeowner who guarantees a minimum 50% booking at full rental rates. She limits herself to just a handful properties all within Rosemary, Seacrest & Seagrove. She's been doing this for the last two years now and all the homeowners I've contacted are thrilled with her results. She handles all issues and sends them a check less her fee. Two of her properties sold and I'm considering taking her up on her services.

I have seen a few owners who have a knack for renting their own properties start taking on others in the same development or neighborhood. Some have grown in to small niche companies, or even larger. These are people who are detail oriented, hard workers, and good business people. As I recall it is illegal unless operating with or under a broker's license but there may be ways around it.

 

[Mermaid]

I started renting my own home this year threw vrbo. Its a learning process from everything from the contract to answering inquiries. Its very time consuming but its also very easy to rent your home or condo on 30-a using vrbo. i'm shocked by the vol of inquiries .by renting yourself you have control who uses your home.its like any system and once you have your system down its not to bad.

I too use VRBO, but as a supplement to my local rental agency. It's a nice compromise. Anyone who wants to rent my condo contacts me first through VRBO and then I turn the reservation over to the agency and they take it from there. I like it because I get to screen the renters first but I don't have to deal with credit cards and deposit money. And if any issues arise while someone's at the condo--say the A/C goes on the fritz--my agency takes care of it on the spot. I pay 12% commission for this service and it's entirely worth it to me. I think it's a bargain!

 

[Ohio Girl]

I too use VRBO, but as a supplement to my local rental agency. It's a nice compromise. Anyone who wants to rent my condo contacts me first through VRBO and then I turn the reservation over to the agency and they take it from there. I like it because I get to screen the renters first but I don't have to deal with credit cards and deposit money. And if any issues arise while someone's at the condo--say the A/C goes on the fritz--my agency takes care of it on the spot. I pay 12% commission for this service and it's entirely worth it to me. I think it's a bargain!

Which agency are you using? 12% sounds like a steal.

 

[Matt J]

I have seen a few owners who have a knack for renting their own properties start taking on others in the same development or neighborhood. Some have grown in to small niche companies, or even larger. These are people who are detail oriented, hard workers, and good business people. As I recall it is illegal unless operating with or under a broker's license but there may be ways around it.

IIRC short terms rentals do not require any special license. Long term rentals do however require a Real Estate license unless it's owner to tenant directly.

 

[Mermaid]

Which agency are you using? 12% sounds like a steal.

Paradise Rentals Paradise Properties Vacation Rentals & Sales - Destin, Grayton, Santa Rosa Beach, Seaside, Seagrove, Panama City Beach Real Estate I do a bit of the footwork and that's why I get that rate. If I wanted full-service the percentage would be higher. I've been very happy with Paradise. They keep the condo immaculately clean, answer phone calls and e-mails promptly, and have good service people if there's a problem with the a/c, plumbing or whatever. It's been a good relationship with them.

 

[ShallowsNole]

Owners renting for other owners can be quite successful, and a broker's license isn't required. But, a helpful tip from the tax lady - make sure both parties are in agreement as to who is supposed to remit the sales/bed tax to the state and to the county. Hint - it is supposed to be whoever collects the funds from the guests.

You'd be amazed at the people who don't realize their property manager is sending THEM the taxes, thinking they are remitting it...:shock:

 

[Kurt]

IIRC short terms rentals do not require any special license. Long term rentals do however require a Real Estate license unless it's owner to tenant directly.

That's what I thought, but I believe there are other technicalities that apply from DPBR, or possibly other entities. I know of at least a couple of people who have gotten burned as a result of licensed competitors lighting the torch and were forced to get a license or operate under somone else's.

 

[ShallowsNole]

That's what I thought, but I believe there are other technicalities that apply from DPBR, or possibly other entities. I know of at least a couple of people who have gotten burned as a result of licensed competitors lighting the torch and were forced to get a license or operate under somone else's.

No broker's license needed, but every rental accommodation in the State of Florida is supposed to have a hotel license from DBPR.

 

[Mermaid]

No broker's license needed, but every rental accommodation in the State of Florida is supposed to have a hotel license from DBPR.

Just to clarify, this is what the DBPR has to say in regard to public lodging establishments:

Does Not Need DBPR License


Condominium rented as transient housing by a Condominium Association as defined in Chapter 718.103, F.S. if the Condominium Association does not own the unit.

DOES Need DBPR License

Condominium or timeshare building with 5 or more units owned or operated by a single entity and advertised or rented for nontransient occupancy.