Vacation rental owners have an expanding circle of resources to help them both find tenants and keep their investment in tip top shape, and they can do it with varying levels of hands-on, or hands-off participation.
Drew Macdonald, a vacation rental property manager and founder of Direct Home Rentals a year-old vacation rental listings site serving the Marco Island-to-Sarasota area, along Florida's western peninsula region, says a cottage industry of services allows vacation rental owners to choose several marketing paths, each with its own set of pros and cons.
Knowing which to choose for your vacation rental property is key.
Do-It-Yourself Marketing
Websites like DirectHomeRentals.com and dozens of others -- large and small, mom-and-pop and corporate sized -- make it easy and cost effective to reach a global travel market.
"Property owners are able to exchange leases by email, and accept deposits through PayPal. Properties get booked and vacation owners retain more of their rental income," says Macdonald.
Recent studies reveal vacation rentals are as attractive as amenity-laden resort hotels, but the do-it-yourself crowd has missed out on some exposure because of the cost of marketing, says Emily Glossbrenner, co-author of "How to Make Your Vacation Property Work For You" (Fire Crystal Communications, $99) book and CD kit.
"Travel agents won't tell people about them because vacation-rental owners aren't willing to pay the 10 percent (or more) commission that hotels and resorts pay them. You won't discover these properties in the travel sections of magazines and newspapers, because ads are too expensive. The leading vacation-rental websites aren't much help, because their search features are limited," said Glossbrenner.
But that's changing thanks to mergers, acquisitions and the growing level of sophistication that can give vacation property owners a special marketing boost.
"Over the past year, with HomeAway.com's purchase of leading vacation-rental sites, this has begun to change. People will soon be able to search a master database of properties to find just the right place, with availability for the dates they need, and with the features and amenities they want -- whether it's a rustic cabin in the woods or a luxury-filled villa to rival the finest five-star resort," said Glossbrenner.
Many of those features alread exist online for the vacation rental home seeker.
But the do-it-yourself rental property owner needs to know a lot more than just marketing.
"It's too easy for the 'rental by owner' to make a mistake in violating Fair Housing Laws. Your fine for violating Fair Housing laws could easily be $25,000. Always use professionals to handle rentals and liability," said Romeo Danais, a real estate investor/owner of Romic Financials in Oklahoma City, OK.
Macdonald says, however, it's more common to see problems arise from owners trying to maintain property from a distance, relying on neighbors and friends to keep an eye on their investment. Not a prudent approach.
Professional home watch services can help bridge the gap, for a fee that cuts into rental income and hoped for do-it-yourself savings.
The best do-it-yourselfers have a background in property management, live within 'emergency distance' of the property or can otherwise get there quickly, should the need arise. They also tend to be fast learners with flexible time schedules.
"They also want control of their investments. Just as E-trade and other stock trading sites are popular, there are many property owners who have the same mentality," says Christine Karpinski, real estate investor, author and director of Owner Advocacy for HomeAway.com, a network of vacation rental listing websites.
Rental Agency/Property Manager Marketing
Rental agencies, property managers and similar companies take the guesswork out of doing-it-yourself and stand in for the property owner on all aspects of property management from finding renters (and kicking them out, if necessary) to maintaining the property inside and out, all depending upon the level of service the owner buys.
They can provide housekeeping services, repairs, maintenance and cosmetic upkeep, rental contracts, bookkeeping and virtually any related service the owner needs and chooses to buy.
Many full-service firms are operated by real estate agents carrying the National Association of Realtors' "Resort & Second-Home Property Specialist" (RSPS) designation indicating experience in the business.
"With the stiff online competition created by 'by owner' websites, rental agencies have been forced to adapt to the changing market. Many rental agencies have designed and developed websites that offer many of the features and capabilities of their online competitors. In addition, rental agents also list their properties on competing rental websites," said Macdonald.
Perhaps the only drawback is the cost, typically 10 to 20 percent or more of the gross rental income, which obviously eats into the cash flow. In hot markets, the cut can be much higher -- as high as 50 percent!
Karpinski says property owners use a property manager because they don't have the time or desire to handle the chores or they don't have a choice because they purchased in a development where the property manager has exclusive rental agency rights.
"Others do it because they think they have no other option. Often their real estate agent will coax them into using their property manager services. Some real estate agents make more money in the residual income from renting than they do from the commissions on the sale itself," said Karpinski.
Vacation Rental Marketing Hybridization
Just as discount real estate brokers have become more viable in the resale home market to meet the needs of those who don't need full service brokers to buy or sell a home, hybridization has hit the vacation rental marketing business.
"As the online competition for vacation rentals increases some rental agents have begun to hybridize their industry with the Internet. These rental hybrids offer all the benefits of online marketing with services like home watch, and residential cleaning after tenants check out. These hybrid rental companies can offer fee-based services and lower commissions," said Macdonald.
The vacation home owner gets to choose from a menu of services that offer the best of both worlds.
Karpinski says property owners who go hybrid typically are "generally happy with auxiliary services the property manager offers, but don't want to pay high commissions."
They also perhaps are not fully satisfied with property management services and are using it as a stepping stone before going solo, and renting on their own.
Also, Karpinski said, "They (property owners) are too uneasy to cut off all of their ties with the property manager," and retain their services as a fail safe measure.
