Manage Your Vacation Rental Home Yourself to Increase Income and Save Money

If you own a rental property it's likely that you contract with a property management company to handle your rental. If so, you are missing an opportunity to make much more money and to keep your home in better condition by attracting better guests who will care for your home with respect.

For many years we owned an investment property in a beach resort. Since we didn't live in the area, we thought it prudent to hire a local rental property management company. It isn't like it really cost us any money out of pocket, we figured, as they got paid only on commission. So, if the home rented, we had to pay the management company a 21% commission, but for the weeks it didn't rent, it didn't cost us anything. Plus, they secured the rental guests and spent a great deal on advertising the property so we didn't have to. Over the years, we did start to feel like we were wasting money and perhaps being ripped off because we would occasionally get billed what seemed like an exorbitant amount of money for small repairs. We found out, for example, that the management company tacked on 10% to every vendor bill so that when the hot water heater had to be replaced, we paid the plumber and the management company billed us an additional 10% just for making the call. We saw that as unfair because we were, after all, already paying them 21% of the income for "managing" the property. When they charged a homeowner $90 to send someone to the house to change a light bulb, we started seeking a better way to manage our home and we found it. You can too.

If you are paying a management company it's time to stop and consider managing the property yourself. There are a number of online sites where owners can manage their own properties for a very nominal cost. Vacation Rentals by Owner (vrbo.com) and vacationrentals.com are two good ones but there are several others and new ones crop up all of the time. Because we have used both of those, this hub will focus on how those work. The concept is pretty much the same despite which site you use. And, they are useful all over the world.

As the homeowner, you pay a yearly fee for advertising your home on the sites. It's about $250/year and it's well worth it. The price you pay depends on a few things like how many photos you want on your page and if you want the home "featured" in some way. Some sites offer a discount if you sign on for multiple years at once.

After signing up you create a page showcasing your home. The sites have very clear descriptions on how to do this and no special skills are required. There are step-by-step instructions for creating your page. You write a description and upload photos. Don't worry if you're not a great writer. Take the time to read some of the descriptions of other properties to see how it's done. Think about what makes your home special and put those details in. Think about what you like in a vacation spot and what you'd want to know about a place you're considering going. Make sure you are truly honest about your home. You want the renters who stay in your home to arrive to find that the home is as good as you promised or better.

The sites include calendars for showing the available weeks. As your home rents, you simply mark off the weeks that are already booked. The sites also have suggestions for payment. If you want to accept credit cards, the rental sites will offer you a way to do so. We chose to stick with personal checks (although more and more people will prefer to use a credit card, we thought we'd be able to charge a bit less by not using credit and having to charge a bank fee) with a 50% non-refundable deposit due when reserving the week and the rest of the rent plus a security deposit plus the necessary taxes due 30 days prior to check in. We also used a key/lock box at our home so that we didn't have to mail any keys to any guests. We simply sent our guests the lock box combination (much like the ones realtors use to show homes when no one is home) and they replaced the keys there when their week was over.

Because our home was in a resort town, there was lots of competition for rentals. We were able to price our home at about a 10% discount from comparable homes because we no longer had to pay the management company 21% of our rental income. But, our guests were happy to save some money so our home rented really well compared to the other choices of homes.

We had a reliable list of local handymen, plumbers, electricians, etc. whom we could call if a guest had a problem during their stay. We provided the guests with our cell phone number in case of emergency so that they could always reach us if there was a problem in the house. (There will be; these things happen so be prepared.) We also contracted with a local company to clean the house each week between guests and to clean and change the linens. The cleaning crew also served as an inspection team since they went in just after the guests left and would find out right away if anything was broken and would require our keeping any of the security deposit. There are also insurance companies that will sell you rental home insurance so that you don't even have to take security deposits if you prefer not to. You an purchase the weekly insurance at a nominal fee and simply pass that cost along to your renter who might prefer to spend about $30/week on the insurance rather than to have to send several hundred in a security deposit. You may even want to offer your renters a choice. Would they rather you purchase the insurance for them or would they prefer to put out the security deposit?

What we discovered is that the caliber of renters we got from managing the home ourselves was far better than the guests we used to get from the management company. I think because people dealt with us directly, via phone and email, they truly understood that the home they were renting belonged to real people, not just a big company. As such, they took much better care of our home.

All in all renting our home ourselves is a huge success. We make more money, we have far fewer headaches and we secure better guests.