Good question. Why should you? And if you have the time and inclination to advertise and market your property; handle hundreds of email and phone enquiries; screen your renters; collect a deposit and final balance; generate a rental management agreement and Terms and Conditions of Rental; and follow up after the rental, then you should have no need of a company to do this for you. Many owners love doing just this and enjoy the opportunity to communicate directly with their rental clients. Others want to use their valuable time elsewhere and are happy to abrogate responsibility for the work to a reputable rental agency.
Don’t confuse rental management with property management. The former just handles the things I’ve mentioned above, while the latter will physically look after the property, do the changeovers and liase with renters while they are in residence.
Every area is different and the level of services offered will depend on the size of the company and the concentration of properties in the area.
Rental Management only
These companies are like the one I manage, and are generally in areas where the geographical location of properties makes offering property care impractical. Property owners provide their own changeover, maintenance and emergency service either by doing it themselves or independently hiring. The agency will take care of all the marketing, screening, reservations, guest communication and follow-up but owners tend to have more involvement with their guests. They may do meet-and-greet and onsite management or hire a caretaker, or property maintenance company to undertake these tasks.
Rental Management + third party Property Management
Where a rental company doesn’t provide in-house services they will work with an outside agency to provide cleaning and maintenance and to deal with any issues that may arise during a guest rental period. Where a Home Owners Association (HOA) manages rentals in condo units or a gated community this is often the model of rental/property management provided.
This is the most common type of agency mostly operating in areas where there are concentrations of properties. They tend to be much larger and employ their own in-house cleaning and maintenance staff. They will deal with emergencies, breakdowns, query calls from guests – in fact, every aspect of a reservation.
What is the right type for you?
If you have a choice, really think about what is the best for you.
– Do you want to be involved with the hospitality side; meet and greet your guests, or have your own property manager do this for you?
– Would you prefer a completely hands-off approach and simply collect the rental fees?
For some owners starting out with a new rental property, the first option may be good, as you use the agency to find your ideal guests and manage all the communications with them until the vacation starts. Your guests are still getting a human approach from the very start, and a good agency will begin a great relationship with them before they arrive at your property.
Spend time looking for the right agency especially if there are several serving the area you are in.
– Look for a great web site that is updated frequently, is easy to navigate and has attractive and structured listings. Look at the site from a guest perspective – would you find it appealing if you were looking for a vacation property? Is there an up to date availability calendar
– Call them and ask about a couple of their properties as if you were a renter, and assess their customer service skills.
– Find other owners who use agencies and ask for their opinion. Contact them, ask for them to come out and view your property and meet their staff in person.
– Find out about their staffing levels. Are rental enquiries dealt with evenings and weekends? Do calls go to voice mail or are they answered in person? If a message is left, how soon does someone get back to the enquirer?
Do some thorough research. Many provinces and states have legislation relating to vacation rentals designed to protect the consumer. Some require rental agencies to be registered or licensed and if you use an unregistered or unlicensed company you may find that at some time the company is shut down which may leave you high and dry.
Look for a Partnership
Use an agency you can create a relationship with. You’ll trust them to find the right type of guest for your property so it’s important for you to feel confident they will screen efficiently. The best agencies will talk to you about being in partnership; listening to your views on how you want the property promoted and will seek your knowledge about events and attractions to market. They will treat your property as an individual entity rather than just another one to add to a bunch of similar properties. Find out how they will promote your unique features and facilities. Do they run special promotions at different times of the year? How will they get the message out about YOUR property?
Here’s some questions to ask an agency:
What are their hours of operation? How are enquiries dealt with that come outside those hours?
Look for an agency that uses in-house staff or a local call centre to answer out of hours enquiries. This will mean that very few calls go to voice mail and potential guests get a real person on the phone when they call. This can make the difference between your property being booked and the guest moving on to the next property on a list. In our agency, we get calls through the night, often from shift workers. Because we employ a 24-hour service from a local call centre and train those staff ourselves, even someone calling at 3am will get to speak to a real person who is knowledgable about the website and can guide a caller in the right direction to find the information they want.
How do you use social media such as Twitter, Facebook, LinkedIn, Google +, Pinterest and YouTube to market your properties?
If an agency is not using social networking sites they are losing out on a vast resource of site visitors and potential guests. Savvy agencies will have a Facebook page, be active on Twitter and will probably have their own YouTube channel for showcasing their property videos. Too many agencies are still stuck in old thinking that it’s enough to have a web site and hope visitors will come.
Where will you market my property?
Agencies should not limit marketing to their own web site. The better ones will be able to demonstrate they have a presence on major listing sites too.
They may not advertise every property in their portfolio but will feature a representative amount that will encourage clickbacks to the home site. Expect them to have a good marketing reach.
Do you use electronic and digitally signed agreements to keep paperwork to a minimum?
Ease of booking creates confidence in a company. Top agencies no longer use fax & snail mail for rental agreements; they have now incorporated electronic (bank encrypted) document systems to enable quick turnaround on paperwork. Most have in-built reservation systems that allow for online booking.
How do you screen guests?
You may not want spring breakers or bacherolette parties; perhaps your property location is not suitable for small children or the elderly or less mobile guest. It’s worthwhile asking an agency how they deal with your specific requirements, or do they allow online bookings without any screening.
Are you legally operating under national, state or provincial regulations?
Many countries, states and provinces require sellers of third party travel products to be legally registered and comply with federal or provincial legislation. For example, in Ontario, Canada, rental agencies must be members of the Travel Industry Council of Ontario (TICO) in order to operate legally. This is a measure of protection for the consumer and having this registration shows potential renters that the agency is a professional business.
Do you own and rent out your own properties?
It’s important that someone at the agency you are dealing with understands what it is like to own and rent a property. They have experienced the occasional damage and wear and tear; they know what to expect of a rental guest and can share that knowledge with you. Putting your property in the hands of someone experienced at all levels of vacation rental is wiser than registering with a person who may offer a lower commission rate, but hasn’t got much of an idea how to market you property.
What does this cost?
“The bitterness of poor quality remains long after the sweetness of low price is forgotten.” Benjamin Franklin
Agency rates vary widely, and are dependent on the services they provide so you will need to research what is available in your area.
Doing your homework thoroughly will indicate where you will get the best value whilst remembering that the old adage also applies, ‘You get what you pay for’. Good marketing is expensive and what you get for an extra 1% or 2% may be maximum occupancy compared to empty weeks.
The Vacation Rental Managers Association (VRMA) is North America’s largest organization of professional rental agencies. Check their membership here: www.vrma.com
Post your questions or experiences about working with an agency. Do you have tips for other owners to help them make a good decision? I would love to hear your views.