Over the past several months, I have been asked the same question repeatedly…. ‘How do you find the best vacation home property manager in Park City?’
It is fair to say that a good property manager saves you both time and money but most importantly acts pro-actively to protect your home and investment. All too frequently, vacation homeowners get overly frustrated as they take on too much and try to cope with simple tasks that through sheer distance alone are made more complicated or worse still, adopt a minimalist approach to home ownership and choose short term economics over longer term robustness, sustainability and in turn future enjoyment of their vacation home.
It is easier to measure the money side of things, but it is the time and interruptions to our normal everyday lives that are difficult to quantify and are generally the cause of most of our angst when it comes to vacation home ownership.
It doesn’t have to be this way!
Here are the main factors that we recommend homeowners consider in their search for an ideal property manager:
1. How many properties are they currently managing? How many employess do they have managing vacation properties?
Whilst many will look at this question and conclude that a higher number is actually a gauge of their success, we beg to differ. A property manager who is overly stretched cannot afford to attend to the often detailed and specific needs of a homeowner. It is possible to be lost in a crowd and all things being equal, you will gravitate to an average level of attention and service.
2. Do they own any vacation / rental properties themselves?
This question can cut both ways and depends more on the individual homeowner. On the one side, a fellow investor or homeowner can better empathize with your goals and requirements but on the other, some homeowners will view this as a potential source of competition that they will never be chosen over.
3. What is the property manager’s approach to addressing maintenance issues?
In many cases this boils down to how does the property manager get paid. Several will simply add on a fixed percentage (typically 10-20%) whilst others will take over the decision process on your behalf up to a certain $ threshold. In the case of the former, we recommend that you have this term waived as it simply does not encourage fundamentally strong long term maintenance decisons. If you go down the threshold route, we recommend that you keep that threshold low ($150-$250) in the beginning until you build up a comfortable level of trust with your property manager. We certainly prefer the second option and choose to focus on how the property manager accounts for their time spent outside of the pre agreed monthly management fee.
All too often we hear of homeowners complaining of being ‘nickeled and dimed at every corner’. You know your property and hopefully have a reasonable expectation of the general level of upkeep / maintenance that is required to ensure that you are able to enjoy it for years to come. Do factor in the harsh conditions that exist in Park City, but a good property manager will be able to guide you in terms of expectations for typical annual expenses.
4. Frequency of inspections?
This is typically highly correlated with the monthly management fee but something that the homeowner has to consider when setting an appropriate budget for property management. As interactive and smart as we can make our homes currently, there is no substitute for a personal inspection. We recommend weekly inspections simply due to the fact that Park City and its surrounding areas experience fast changing and wide varying weather conditions. The monetary and physical damage that can be caused if caught on the wrong side can be material. The homeowner will ultimately decide but we urge to err on the side of caution and more frequent inspections.
5. Interview your potential property manager thoroughly.
This might seem obvious and simplistic to some but ensure you engage a property manager who listens to YOU. A good property manager strives to meet YOUR needs and makes sure YOU are happy.
6. Do not be influenced by the promise of outsize rental incomes when the property is not being enjoyed by YOU.
An all too common trap. Homeowners envisage themselves using their property during the peak periods of the winter season and convince themselves that the rental income that their property can generate during the rest of the year will more than offset their costs of ownership. This is a very unpopular thing to say but this is myth. Set your expectations accordingly. A property manager who says different, in our humble opinion, is setting misleading expectations. In our experience, take away the week around New Year and the opening week of Sundance for personal use and that effectively removes 20-25% of your potential annual rental income.
7. If you want to rent out your property, what will the property manager charge?
For a long time in Park City, 40-50% of rental income after expenses was very much the norm. This seems extortionate to many but it is important to remember that the property manager is looking after your property for 12 months of the year and not just the 4 months of the winter season when your property will generate the vast majority of its rental income. Having said that, the increased competition amongst managers and the rapid rise in popularity of several vacation rental websites are forcing these rates down. Make sure you are comparing like with like – several property managers may charge the same commission but a subset may differentiate themselves by offering a wide variety of complimentary concierge services. Ascertain the target clientelle for your property and go with the property manager who best services that market segment at a fair commission.
8. What is your rental income goal?
An important long term factor. Do you want to maximize rental income or do you prefer to factor in the amount of days your property is rented? Lower rents will attract more bookings, but does the increased traffic through your property justify the potential increase in annual rental income?
9. If you want to rent out your property, what are the set up costs?
Do have this conversation prior to engagement. There are numerous expenses to be considered and they vary from business licenses and taxes (both sales and transient room) to bedlinen requirements and basic inventory expectations of guests. Ascertain who is responsible for each.
The goal of the above is to provide a sensible starting point for the vacation homeowner who is looking for a new property manager. There can be numerous other factors that are specific to your property but the point is to identify them beforehand and interview your potential property managers accordingly.
There is a lot of choice out there. Best of luck!