We've all heard the horror stories...owners being burned by a bad property manager. If your investment properties are miles away, you might be a victim of "ghost bookings" and other seedy practices. Check out this interesting article in the New York Times and see how one owner took matters into their own hands.
Source: AMY GUNDERSON, New York Times
Here are some excerpts from this article:
John Malam lives in Cheshire, England, so two and a half years ago, when he bought a five-bedroom house in Davenport, Fla., near Disney World, he decided he needed a local property manager. He wanted someone to seal the house in the event of a hurricane, and to handle rentals, but most of all he wanted a company he could trust. He said he had heard horror stories from fellow property owners, including tales of management companies renting out homes and not telling the owners.
“Those are called ghost bookings,” he said. “And owners never see the income.”
He looked at three local management companies, visiting them in person when he was in town, and decided on Florida Spirit Vacation Homes in ChampionsGate Fla., because the firm had a robust advertising budget and maintained a Web site that allows an owner to log on and see when the house is booked for renters and when it has vacancies.
A common reason to pick a property management company. It's worth mentioning that Propertyware provides subscribers with tools to advertise vacancies on their own customizable website and publish listing on free listing sites. (I know it's a plug...but it's the TRUTH!)
"Expect to pay anywhere from 25 percent to more than 40 percent of the rental revenue to the company for its services. While that will cover the cost of booking rentals, screening renters, advertising and perhaps cleaning, owners also need to ask about extra fees", said Marie Ferguson, an owner of a vacation home in West Palm Beach and the author of “Breaking all the Rules: How to Rent Your Vacation Home."
Some great screening questions for a property management company include:
1) Will they answer questions from the renter or will renters call you?
2) If a renter calls the management company with an emergency, are you going to get charged for that?”
3) How long has the company has been in business?
4) How many homes do they manage and how many staff members are devoted to watching over the properties?
5) How do they market their rental properties? Do they have a budget for this?
6) Can they provide you with a sample report showing rental and marketing activity for a given period?
For example, Tahoe Luxury Properties manages 130 homes in towns north and west of Lake Tahoe, Calif. The homes are handled by a staff of 30 caretakers so that each is responsible for no more than five homes, said Kelly Dietz, the owner of the company, which charges a fee of 35 percent of the rental income.
Posted by: Jason Ganz