Q: I am not sure I want people I do not know staying at my house. How can you get me comfortable with this?
A: Maura and I had to get over this emotional issue as well. We had poured so much into the place and now we are going to let the public stay at our place/sleep in our bed. When we started getting nice comments in the guest book and we realized the majority of people are respectful of the property…these concerns/emotions went away.
Q. What is the standard commission rate?
A. Our commission rate is 30% of the collected rents. Rates are negotiable on larger houses.
Q. How will the nightly/weekly rental rate be determined?
A. The number of guest allowed, quality of the home, and amenities are the major factors that affect the rental rates guest are willing to pay. We inspect your property and suggest a rate but you make the final decision. As you might imagine, rental rate increases and decreases have an effect on occupancy rates. Other things that affect rates are term of the stay. A weekly rate is the same as a 6 night stay…so 1 night free. We also recommend a reduced rate (30% reduction) during the off season (Oct-Apr). These are totally up to you.
Q: Which properties make for the best rentals?
A: Believe it or not, the bigger the better. A three bedroom or more works best but there is also a market for smaller cabins. You will want to configure for maximum sleeping. The more families that can stay at the house, the more rent you can charge. The number of guest that can stay is completely up to you.
Q. What differentiates your marketing program from your competition?
A. Simply stated, our exposure is the best on the lake. We have our own website (SmithLakeRentals.com) and put most properties not for sale on VRBO. We are the only full service rental company in the top search results for Google or Bing (type Smith Lake Rentals in the search box). We sent out 7 newsletters in 2013 to a database of over 3000 past guests and prospects. We also have started a Facebook page and are experimenting with Twitter for last minute specials.
Q. Can I limit the number of people occupying my unit?
A. Yes. This is strictly your decision. We will advise you and you decide.
Q. What level of communication can I expect from you?
A. Each month we will send you a statement itemizing rentals for the previous month along with any expenses and a check. We will notify you every time a reservation is made or cancelled. Occasionally we will contact you to ask questions about certain aspects of the house where we are having issues (i.e. Direct TV). We will call you if there are any requests that are outside the normal.
Q. How do I enter the rental program?
A. We will need to inspect your property to determine anything that needs to be done to get it ready for renting and to estimate the rental amount. Upon inspection, we will let you know if anything needs to be done before it can be added to our Leasing Program. Our Management Agreement must then be executed. We will then take pictures, videos and get it on the websites.
Q. What will be the up-front cost?
A. Sheets, air filters, light bulbs, and anything else that makes the house ready for guests (e.g. pots, pans, grill).
Q. How is my property selected by a guest?
A. Two ways: 1) it is specifically requested or 2) it meets the criteria the guest is looking for.
Q. Do guests use my bed linens?
A. Depends. You can share the linens with guests or you can put your linens in the Owners Closet and use for you exclusively. The cleaning crew cleans and replaces all linens as part of the cleaning service. Most owners lock up their personal linens.
Q: What do you do when there are problems during a stay?
A: We have a couple of people around the lake that handle the small items and trusted vendors who provide more technical services (e.g. HVAC, plumbing, electrical, dock repair, etc.) issues. We will call you if there is a major problem or something you may know about exclusively. We can also work with any current vendors that may already know your property.
Q: How do I schedule owner use of the property?
A: We ask that you schedule these dates as early as possible before the reservations start coming in (they start in earnest in March for the summer). You will simply email or call us and we will block these dates. You will have an online calendar you can always check to see availability.
Q: Do I have to pay to have the property cleaned after an owner stay?
A: When you or friends go to the property we do require that we either clean it or do a spot check. The cleaning fees vary with the size of the house but range from $50 for a small cabin to $350 for our largest. We simply take this out of your monthly check so you never come out of pocket. Our owners find this to be nice since they no longer have to spend their lake time cleaning up the place. Having a property ready for paying guests and having it ready for friends and family is two different levels of clean. We learned this the hard way!
Q: How do you handle houses for sale?
A: A number of our houses are for sale. We ask that you put in your agreement with a buyer that the new owner honor the remaining rentals. If this is not possible then we: 1) ensure guest understands the house is for sale and will increase the chance that they may have to change houses and 2) we do not enter into long term advertising.
Q: How do you protect owner belongings?
A: We rarely have anything taken on purpose. We occasionally have the life vest that ends up going home. Either way, we work with the guest and you to resolve the situation. If a big situation arises, we have deposits, insurance and the legal system to use in resolving the situation.
Q: How does this affect my insurance?
A: You will need to talk to your agent and ensure that rentals are covered. In my case, we had to get a commercial policy but we have found that every company is different.
Q: Will income from the rentals pay for my house?
A: DO NOT expect the rental income to pay for the house. Property appreciation is where you will make your money. The income will pay all of your monthly expenses (not mortgage) and provide you money to do improvement projects. You can convert the house to an investment which allows you to write off expenses and depreciate the property and improvements. PLEASE consult your tax advisor on this item. See these links for more information: 5 IRS Rules for Renting Out Your Vacation Home and IRS Publication 527 (Vacation rental regulations)
Q: Why would I not rent the house myself and save your commissions?
A: Couple of reasons:
1) We believe you will make more money on our program than doing it yourself and we do all the work! Below are a few of the reasons:
• Because of our marketing activities and reputation, we can get more per night and dramatically increase your exposure over what you can do yourself. Many guests like dealing with us as they know what to expect when coming to one of our properties.
• Guests are checking on multiple houses and the one that responds the quickest typically gets the reservation. The fact we do this fulltime and have multiple channels makes us available and not something we do in the evening.
• By using a third party it removes you from the emotion invoked when dealing directly with guests.
2) Is this what you really want to spend your time doing? Talk to prospective renters, collect funds, pay taxes, find schedule and pay cleaners, handle issues, find and pay reliable vendors. Unless you have the correct mentaility, this will drive you crazy!
Q: What income should I expect?
A: The income you receive is affected by how many weekends you are there, the condition of the house, and the price. Most of our owners use the houses 2-3 weekends during the peak period. Below are some example numbers pulled from 2013. The 2013 Net is the amount to the owner (i.e., after commissions):
• 3 BR Condo, sleeps 6, $165/nt, 2015 Net = $6,600
• 4 BR House, sleeps 12, $350/nt, 2015 Net = $14,638
• 5 BR House, sleeps 12, $500/nt, 2015 Net = $21,985
• 5 BR House, sleeps 15, $650/nt, 2015 Net = $18,926