Once you’ve decided to rent out your property as a holiday rental, your next decision is whether you’ll self-manage the property or hire someone to do it for you.
If you do not live near your holiday rental property you’ll probably need to hire a manager. You can either choose a professional real estate/property management company or find an independent property manager. When choosing a property management company or property manager be sure to do your research. Ensure they have a good reputation and competitive fees.
Some property management companies charge large fees for limited duties – and this will quickly eat into any profits your holiday rental property makes. Most management companies have a base charge of 18-20% of rental revenue, with additional fees for linen, call outs, advertising, etc. These can quickly add up and turn your holiday rental property into a break-even or loss-making proposition.
How can I keep my property manager fees to a minimum?
A cheaper alternative to a property management company is an independent property manager, someone you know or a local resident found through an advert. If you don’t know them personally, ensure you check references and their experience. You might be lucky and have a hotel management school or tourism course taught locally. Approach them for a recommendation or offer to provide one of their students with some job experience.
To save further management fees (and for your own comfort) you can also choose to manage the property bookings yourself. This will involve advertising online, providing quotes and collecting rents and security deposits. In our experience, you’ll save substantial management fees by hiring an independent property manager and then managing some of the duties yourself.
But make sure you have a clear agreement with your property manager. Agreeing a list of their duties and responsibilities in a professional contract is a very good idea. This will help avoid misunderstandings and ensure you have a great relationship with your manager.