Self Management - the Pros and Cons
By William May
Published: 09/22/03
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Comments: 0
The Internet has made it possible for more owners to manage their own vacation rental home, bypassing the traditional property management and booking companies. Is this a good idea for you? Maybe and maybe not. The decision is not as cut and dried as you might think.
Last week Amy - a member from Michigan wrote asked about the ins and outs of managing her own vacation home. She has gotten some great advice from Christine Karpinski a consultant in Florida who offers Seminar and advice on "how to" manage your own unit You can find Christine's contact information in both the Member and Supplier sections of the Members Only VROA pages.
Because Amy is so enthused about managing her own property and because she's been wise to do her homework I think she'll have great success with her home. And that is one of the hallmarks of owners who seem to be doing well with their homes - they have to enjoy it.
So how do you know if self-management is for you? Let me say first of all that VROA doesn't take sides on this issue. The association has much to offer owners who use managers and those who do not. Our mission is to help both know the issues and find that path that suits them best.Clearly self management can be advantageous to certain owners. But there are distinct benefits that management firms offer. Let's look at a few of the issues owner's should consider before making a decision about self management.
MONEY: Perhaps the best and worst reason to manage your own unit is for money. Yes you can escape the manager's fee by managing the home yourself. But you can not escape the management duties. Someone has to answer the phone, arrange for cleaning and maintenance and be available 24 hours per day. Is that what you want? Plus you have determine if you will generate more income - or less. And whether you can cut costs or not.
YOUR TIME: What is your time worth? In truth, you are not escaping the expense. You are simply paying yourself to do what the manager does. If you enjoy the work then self management will be rewarding. If not it will be a pain. If you can invest your unused time you can earn a nice income. If it takes away from your profession or family then you may lose more money than you save.
YOUR SKILLS: The next question is how good are you at the job of managing. You'll need to have good bookkeeping, be able to invoice clients, should consider getting a merchant account so you can take credit cards, have to pay cleaners and maintenance firms (sometimes in advance) and never make a mistake on scheduling. You have to know how to contract with vendors without getting skewered and how to follow up to make sure work is done and done correctly. With a single home these things are not difficult but they need to be precise. If that's not your modus operandi you may make mistakes.
YOUR MARKETING: The next question to test yourself is - how good a marketer and salesman are you? Even though the Internet has drastically changed how guests search for and purchase vacation rental reservations it is not a magic wand. It will not make you successful just because you can put up a website. Plus the internet is changing. Getting listed high in search engines is complicated and can be expensive. The VROA supplier directory currently lists a couple of hundred vacation rental websites (with more appearing every week). No one listing will secure you sufficient bookings - not even close. Are you prepared to advance the money to list on the top 10 or more sites?
SELLING: Are you a sales person? It is not enough to simply answer the phone. You have to put up with lots of questions, dispel lots of fears and determine if your place is right for each guests. If so, then you have to convince them to book. Its not easy. You'll spend many hours talking with folks who never rent. The only way to be good at selling is to enjoy it. Do you like people and small talk? If so, this is for you.
FORTITUDE: Like most jobs self-management is often based more on sticking to the task at hand than on some great unusual skills or knowledge. The only thing you now about each reservation is that it must be followed by another. Even if you book strictly by the week that means you need to try to get 52 bookings per year. That will take many out bound phone calls. Many calls to the cleaners. Regular trips to inspect the property and to be available 24 hours per day for issues. If the property is distance soon the joy of staying in your own home can be dashed by the requirement to sometimes drop everything and make the trip.
ATTITUDE: Perhaps the most telling of all owner attributes is attitude. Have you ever gone to a store where the clerk as bored or tired or indifferent? You can bet they weren't highly compensated or might soon be without a job. In managing your own home you can not afford to have a bad attitude. Every day you have to approach the task at had as an important one. You have to teach yourself to love it. And over time you have to pump up your attitude to make sure guests are enthused about staying in your home. Not everyone can do this.
HANDS ON: A common question among owners is how will I arrange cleaning and maintenance. The answer depends on the location of your home. In many destination resorts there are numerous cleaning and maintenance firms happy to work with owners directly with owners. This is a growing industry. We have had good luck with such firms and find them a great help. In smaller or remote communities you may have to hire individuals to do the work. This can be problematic. Even a highly reliable and skilled cleaning person will one day move on to greener pastures. If you can keep someone a year or two consider yourself lucky. Plus you have to worry that a "one person" crew may one day simply not show up or suddenly fail to clean adequately. That means you have to find a replacement - and pronto.
Managers can also suffer such problems but usually have a larger crew and sufficient backups. Good managers have well documented quality control. On the other hand, they can be inflexible as to how they clean and when they clean. In short, however, self-managers should understand they are taking on the duty of operations but gaining some degree of control and cost savings.
MAINTENANCE: A word about maintenance is in order. I have heard frequent complaints from owners who believe that managers are charging them way too much for maintenance. While some managers make significant income by providing building maintenance over the long haul you will learn that rental homes require sufficient and regular maintenance. You will be hard pressed to find independent maintenance firms who charge less than a manager. You may be able to defer some maintenance for a while but in the end you'll have to spend money to keep your place rentable. Yes, you can do some of the maintenance yourself but you can do that with a manager too.
MONEY: And now we return to the money issue. I would urge owners not to abandon managers but also remember that not all managers are created equal. They may have skills you do ot have. The dedication and capabilities they show will differ dramatically. In fact, most are not even comparable in the services they offer or the ways in which they operate. Some are merely cleaning and maintenance firms who answer the phone to take reservations. Others have honed their marketing, sales and business skills and offer a true and valuable service. Your decision about self managing may hinge on whether a good manager is available. If not, then you may have no choice but to undertake the chore yourself.
So now that we've covered some of the tests for self-management let me end by simply saying that the decision to manage your own unit can be a wise one. But it can also be a costly mistake. To make a good decision spend time evaluating your available time, your skills and then make reasonable goals for the home. Those goals should be the same whether you manage it or hire a manager. Before you jump into the self-management business be sure to interview all the managers in your area. Review what they do and what they charge. Insist on checking references. And then compare those managers to what you can do yourself.
The and only then you'll know the pros and cons of managing your own unit. Good luck in that decision.
Please see the website section for other ideas:
- Tip and Techniques
- Supplier directory of Web Listing Sites
- Supplier directory of management firms
FEEDBACK:
As always I seek your feedback. Please share you thoughts, stories, compliments and complaints on this or any other subject by writing me at Director@VROA.orgDirector@VROA.org.
HOME OF THE WEEK:
This week we travel to the Cypress House on Virgin Gorda in the British Virgin Islands. This is a luxurious 2 Bedroom villa on a warm Caribbean Island. Take a peek at (CypressHouseBVI.com)CypressHouseBVI.com. And check out the virtual tour.
*** If you want your place added to the list of weekly contenders just drop me an email.
Author: William May – Volunteer, Vacation Rental Association
Blog #: 0030 – 09/22/03
Comments: 0
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