Using a Real Estate Property Management Company
If you rent your second home and it is some distance from where you live, you will probably need the services of a professional property management company. At a resort, finding a steady flow of short-term tenants is the most important service such a company can provide. Your property should be rented full time during the high season, and for as much time as possible in the off-season. The management company should include your property in online multiple listings and in tourist magazine ads. They should screen prospective tenants, collect deposits and rents, and provide all necessary services, including cleaning, plumbing and electrical work. Finally, they should forward a complete account of all transactions and funds due to you.
Finding a company to perform these functions and maintain the property in rentable condition can cost up to fifty percent of the rental income. If the rent is high and the property has a good occupancy record, paying a big commission to a competent management company makes sense. However, before purchasing such a property, do the math. You don’t want the management company to be the only party to do well from this arrangement. Advice on this from a local, experienced, buyer’s agent could be invaluable. Management of a single-family rental property with a steady tenant is a much simpler undertaking and should cost you about seven percent of the rental income. Finding and screening a tenant will cost you a month’s rent.
If you decide to manage a rental property yourself, provide the tenant with a post office box address to which to send the rent and a phone number to call in an emergency. Find a local handyman or maintenance company to check the property periodically and respond in an emergency. The tenant should have their phone number as well. You can set a ceiling for costs, above which all repairs or maintenance must be approved by you in advance.
