5 Tips for Converting Orlando Vacation Rentals into Long Term Rentals

You purchased an Orlando vacation home, condo or townhome with the plan in mind to rent it out short term allowing you the convenience of also enjoying this home at your discretion throughout the year. However for an array of different reasons, the children are grown, your lifestyle has changed or its is taking too much commitment on your part  you have researched and now have decided that converting your Orlando short term rental into a long term rental may be a switch that you are looking for.

At first glance this may seem like a simple transition but there are several factors to consider when converting to a long term rental. Below you find a list of our top five recommendations that will help make the transition as smooth and successful as possible:

1. Remove Furnishings: Unlike Orlando vacation rentals (short term rentals) where you as the owner are responsible for furnishing your property we find that most long term tenants prefer an unfurnished rental.  With the intention of staying in a rental for a year if not longer this allows the tenant to personalize the space making it feel like a home more than a rental on top of the fact that most long term renters do have furnishing that they intend on moving into their new rental property. If however you rental is currently furnished there are a number of ways to tackle this task. Depending on your attachment to the furnishings you may want to put into storage, sell or auction it off to make a little profit or even give it away to charity.

Watch Our Short Video Clip: Short Term Rentals vs. Long Term Rentals

2. Don’t Upgrade:  One of the biggest mistake we see renters and sellers make is unnecessary upgrades. Unfortunately many upgrades making the property more visually stimulating only take money out of your pocket.  It is very unlikely that a renter will want to pay higher then normal rent due to the fact that you have updated the unit interiors. It is your responsibility as a owner to have the property in rent ready condition, clean and with appliances in good working condition but this by no means entails upgrading or updating the interiors unless absolutely necessary.  When you are converting to a long term rental you must look at the property through the eyes of a landlord and not the eyes of a vacation home owner.

 

3. Tile the Property: Tiling the property is a great way to save on future upgrade and repairs. Due to the high amount of traffic and use that will be put on the carpets it is highly recommended that when the time comes to repair or upgrade the carpets that you research tiling instead. Usually you will find the price is closer than expected and the long term benefits will be tremendous.

Search Hundreds of Orlando Long Term Rental Properties Here

4. Switch Utilities: Immediately have the new tenants put all major utilities into their names. This takes the responsibility out of your hands for the time being. In the case that your current tenants bail or are late on paying the utilities you will not be held liable. In the unfortunate case that this does occur you can call the utility companies to inform and easily have them turned back into your name or new tenants name. The utility company will then pursue the old tenants for back payment releasing you from this responsibility.

 

5. Find an experienced Long Term Rental Property Manager: This does not mean simply choosing the largest or the cheapest you can find. Any money you save can be easily wiped out by an extra month or two on the market due to overwhelmed, inattentive or unskilled management. As investment property specialists and owners ourselves we understand how much this can cost on top of all the other expenses that come with owning a rental property. But this will be one of the most important rules and investments you make in the success of your rental. A long term property manager will play a significant rule in your rental. Management of your property goes well beyond advertising, back ground checks for potential renters and collecting the rent every month, it is more importantly finding great long term tenants so that your investment doesn’t suffer needless downtime and is maintained during a rental period. It is keeping a good business relationship with those tenants so they stay as long as possible and report problems as needed. On top of that, during the inevitable time when a property isn’t collecting rent, a crucial role is keeping that downtime to an absolute minimum. A week or more delay in either getting a bad tenant out of the property or not having it ready for re-leasing can easily cost you thousands. You want to do your research here to ensure that your property will be a priority and that you have an experienced person managing your rental.

We hope to earn the opportunity of helping you achieve your investment property goals this year in 2012. For a free, no obligation investment property consultation with our Director of Sales- Lisa Arcia,  please contact us directly at 866-422-6191 and if you have enjoyed this article please consider subscribing to our blog and stay updated on future information. 

What You Need To Know About Buying a Booked Vacation Home in Orlando

Guest post by Stephen Walker, owner of Signature Villas Orlando

There are always advantages and disadvantages to buying an Orlando vacation rental home that is already under management with bookings in place, which we refer to as “turnkey”. Being in the business I get a first hand insight to what really goes on with booked properties and I want to share with you some of the most important things you should know before you buy one.

New vacation home owners don’t usually buy homes that don’t have a rental history though they should and the ones that do usually end up staying with the current property management because they are so lost in the buying process that they take the easy option. They figure, “Let’s stay and see how it goes”.  In today’s market a lot of the owners who are selling are doing so because they can’t afford their home and there are very few that have made a large profit for numerous reasons.  A couple of these reasons are that  a high percentage bought at a ridiculous price during the boom and have enormous mortgages. Then there are the owners who bought one and just left it up to the management companies to fill and took no active involvement at all.

Scratching Your Vacation Home Niche 

So what does all this have to do with changing management companies when you buy a turnkey property, you may be asking.  If the management company is reputable, they should have a complete history of the home that they can readily provide to you before you purchase so you can get an idea of the type of numbers the home was brining in. It’s just the same as asking another management company to do a rent comparison of an equivalent home in the same area. That’s exactly how realtors price homes. Be careful as it is very easy for the property manager  to put in what I like to call “ghost bookings”. What are ghost bookings? Well, they are false bookings that are made by the management company to entice the new owner to stay. This is a very dangerous game to play but there are many that do it, including a couple of large property management companies who shall remain unnamed.

Another common myth that new owners also believe is that keeping the old management company will be cheaper, but they’re often dead wrong! You’ve bought your first new vacation home and spent i.e. $300,000 on it and now want to save money? It’s one of the worst decisions I see new owners make.  The answer to the problem is so simple and so easy that you will kick yourself. . .  Ask your Realtor! Yes, it’s that easy (assuming your working with the right Realtor). Why is it that easy ? BECAUSE YOU MUST TRUST THEM OR YOU WOULDN’T HAVE SPENT $300,000.00 ON THEIR RECOMMENDATION!

How To Ditch Your Bad Florida Realtor 

If a realtor works for a property management company then they are obligated to their own company. But if you ask that same realtor who else they recommend I guarantee all they will say is ‘”We don’t really recommend other companies blah blah blah”.  So they’re not the best realtors to ask and you probably shouldn’t be working with a Realtor who is also working for a management company! There are some realtors that will give you four or five management companies and this alone is great but why that many?? Lack of faith maybe? Diversity?  Who knows. . .  So which realtor will direct you to the best management company? I would say the one who only recommends a couple that they are not working for. Why is that you may say? A truly honest management company will really only take on homes that they know they can book. I myself try to stick with certain areas and styles of homes like Windsor Hills and Reunion. Some others may deal with town homes and condos better, I myself turn down nearly all town homes and condos as I struggle to book them. So a Realtor who directs you to one good manager has a lot of confidence in that company (assuming it’s not because they are accepting an under the table kick back) and knows what their specialty is.To be honest, it’s in your Realtor’s best interest because they really don’t want you harping in their ear every month about how you’re not making money or how all the bookings that were there have canceled (GHOSTS).

Search Hundreds of Orlando Vacation Homes for Sale 

We hope you enjoyed this guest post by Stephen Walker, a local Orlando vacation home property manager. To learn more about Stephen and the services he provides please visit his website at www.SignatureVillasOrlando.com. 

We hope to earn the opportunity of helping you achieve your investment property goals this year in 2012. For a free, no obligation investment property consultation with our Director of Sales- Lisa Arcia,  please contact us directly at 866-422-6191 and if you have enjoyed this article please consider subscribing to our blog and stay updated on future information.

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Top Five Most Common Complaints From Kissimmee Vacation Home Renters That Could Cost You Money

I had the pleasure of speaking with one of the reservations managers recently at Global Resort Homes and had a nice chat with her about the most commonly complained about items when renters get to their vacation rental home. Many owners lose bookings due to these factors and it costs them money.

Complaint #1. Pool Heat Not Working
This is the number one complaint by guests staying at Orlando vacation rental homes.  The pool heat issues seems to happen quite frequently and it upsets many guests as they were looking forward to jumping in that warm pool after their long flight to Orlando.  They will asked to be credited money back for the pool heat and in many cases if the issue cannot be resolved quickly they will want to switch houses.

Watch Video- Orlando Property Tip: Pool

Complaint #2. No Pool Cover (To Trap Heat)
This is one of those things that many owners don’t really think about but the guests certainly do.  They complain about the pool not having a cover to trap the pool heat and surprisingly it’s a common complaint. I know many owners don’t have a pool cover for their pool as they find it unnecessary because the pool is locate din a screened enclosure but if the money is in the budget it may be worth investing in one.

Watch Video- Orlando Property Tip: Hidden Fees

Complaint #3. Carpets are Stained
The simplest things in life are sometimes the most overlooked things.  If your carpets are stained and dirty your guests will request to be switched to another property almost immediately.  One of the biggest reasons that people rent a vacation home in Orlando is because they don’t like nasty hotels.  The last thing they want to do is walk into a nasty house.  Keep your carpets clean and as free of stains as possible. Ask your management company to have your carpets steam cleaned at least once per year. I recommend every six months if you have a busy property.

Watch Video- Orlando Property Tip: Furnishing

Complaint #4. Ugly Furnishings
For the love of all things vacation homes. . . DON’T GO CHEAP ON YOUR FURNISHINGS! The less you invest the less you get in return.  There are so many other properties in Orlando that owners have put in extra time and effort into the furnishings, this is your competition.  You property may still rent with cheap, ugly floral couches but you certainly won’t be getting the high rent on the street and what you will be attracting is discount renters.  If your goal is to make money at this whole vacation home thing than invest in your investment!

Watch Video- Orlando Property Tip: Gamesroom

Complaint #5. Too Far From Clubhouse
This can be a big deal for some communities. If you’re all the way back at the end of the neighborhood and you don’t supply any type of bikes at your rental property than people are going to get tire very quickly of walking back and fourth to the clubhouse, especially in the middle of summer when it’s blazing hot.  If you found a property and it’s an amazing deal but at the back of the neighborhood, don’t sweat it just supply your property with some bikes.  I personally am a big fan of Radio Flyer wagons!

Did you find this information useful? If so, consider subscribing and get our Free Report: Top 20 Most Critical and Frequently Asked Questions About Buying and Owning an Orlando Vacation Rental Home

The Best of The Pink Flamingo From 2009

2009 was a great year for Orlando vacation home buyers and owners.  It was also the Pink Flamingo’s first year up and running as an official vacation home blog.  I’m really looking forward to 2010 and can’t wait to tell you all about the awesome stuff that is up and coming here.  To start the year off with a bang I thought I’d post the most popular articles from 2009.  Enjoy!

How NOT To Furnish Your Orlando Vacation Rental Home If  You Want Bookings

The 9 Best Kissimmee Gated Communities to Own a Vacation Home In

Why Orlando Is a Great Choice For Canadians To Own a Vacation Home

50+ Sites To Market Your Orlando, Florida Vacation Villa On

The Chuck Norris Guide To Closing On Your Orlando Vacation Home In 30 Days or Less

6 Most Common Expenses Associated With Owning a Disney Area Vacation Rental Home

Everything You Need To Know About Legacy Dunes Condos in Kissimmee & Why They are So Cheap!

10 Questions You Must Ask Before Hiring Any Orlando Property Management Company

How Sticking Your Hand In Toilet Water Can Save You Thousands on Your Kissimmee Home Purchase

Hidden Expenses Your Short Term Rental Management Company Doesn’t Want You To Know About

15 Quick Fix Tips For Getting More Bookings On Your Orlando Vacation Home

6 Common Sense Reasons Why You Should Never List Your Orlando Vacation Home For Sale With a Property Management Company

Are Orlando Vacation Homeowner’s That Self Manage A Threat To Management Companies?

The vacation home industry is growing by leaps and bounds and was one of the most popular choice of accommodations for families traveling to Disney World and other Florida areas in 2009.  With the popularity of vacation homes and consumer awareness growing it’s starting to become a bit more competitive to market vacation rentals online than it used to be.  VRBO, a popular vacation rental by owner site,  is currently dominating the world of direct owner bookings and though there are management companies advertising on the site most of what’s available is listed directly by the owners.

Windsor Hills Resort Bank Owned Vacation Rental Homes For Sale

One of the trends I’m noticing with owners is that many think that if they cut the middle man out (management company) they can market their home at a discounted rate and still receive a larger portion of that money.  This works for many owners who utilize their vacation home rental as a full time business but what about the other owners who don’t want to make marketing and renting their vacation home a full time job and are dependent upon a property management company renting out their property?  These steeply discounted rates that owners are offering on VRBO are in direct competition with what your management company is trying to rent your vacation home for.  Any prospective renter who understands the internet is able to log on and check to see what rentals are going for in your neighborhood and will see these discounted rates being offered by owners.  If your management company is any good at securing retail bookings than they will be aware of this fact up front and know how to up-sell the renter on the benefits of working with a management company over booking directly with the owner (as will owners do the same).  I personally, do not have a preference as to which one is better but there are specific facts about both that should be brought to the renters attention before they make a decision.

Everything You Wish You Knew Before Buying a Florida Vacation Rental Home

Pros of Booking Directly With The Vacation Homeowner

• Homeowner will give a better rate.  Since the middle man is being cut out the homeowner can afford to offer a steeply discounted rate to the renter.
• Homeowner can be more accommodating. Since you are dealing directly with the owner you can ask specific questions about the property that a reservationist at a management company may not be able to answer in as much detail for you such the closest local Italian restaurant or the best view of the Disney fireworks in town.

Cons of Booking Directly With The Vacation Homeowner

• Time difference and emergencies. If the homeowner lives in another country and there is an emergency that requires immediate assistance than it is possible that you could be waiting for a response back for several hours as many homeowners do not have a full time on call maintenance staff to deal with these issues.
• No quality assurance. Some homeowners that manage their own vacation rental properties rely solely on a cleaning crew to maintain their home between guests which means there is more risk of the home not being cleaned to your standards when you arrive.  If you complain to the owner they cannot move you to a new property as most of the time they only own one.

Hidden Expenses Your Short Term Rental Management Company Doesn’t Want You To Know About

The Best of Both Worlds?
There are renters out there who will just always feel more comfortable renting a property that they know is being professionally managed.  With that being said, owners can still cash in on their own bookings while utilizing the assistance of a rental manager.  Many owners will list their properties for rent by owner and secure the booking themselves but have the management company handle the rental aspect of it and pay them a small owner booking fee.  This is a win-win for both the owner and the renter as the renter gets a peace of mind knowing that if something goes wrong with the property they will be accommodated immediately and the owner get their chunk on the booking revenue while doing a quarter of the work that a self managing owner would do.

What is your take on self-managing vacation homeowners offering competitive rates to undercut rental manager bookings?

The Mandatory Tax and Legal Procedures Associated With Buying a Disney Area Vacation Home

The Federal The State of Florida The County where the Home or Unit is located. —–The County may have sublevels such as: —– City —– Subdivision or Zoning

. Federal or IRS The owner or owners need to obtain an Identification Number issued by IRS for each owner listed on the DEED of the property. If it is a corporation then a Federal Tax ID number is issued to the corporation. For individuals that are United States citizens, the social security number is what will be used both on the contract when you purchase the home or unit and for the process of licensing the home and your tax requirements. If you are not a US citizen you must obtain an Individual Tax Identification Number known as a ITIN before you can obtain a license, tax certificate or occupational license to operate your short term rental business. Ideally your ACCOUNTANT should start this process as soon as you decide to purchase a home in Florida. If you do not have an accountant that specializes in short term rentals near Disney your Realtor should be able to point you in the direction of one. For all non US citizens a W-7 needs to be filled out and then taken to the IRS office with your passport and another form of ID. The nearest office is at 850 Trafalgar Court, Suite 200, Maitland, Florida. This application process can also be done at the US Embassy in your country. Once you have selected a property management company or rental revenue source the form W-8ECI from every owner on the deed should be filled out and given to them. At year end you should each expect to receive a 1042S. All names on the deed will be expected to file a separate US tax return. When you set up your bank account a W-8BEN will be needed. Once this process has started you then proceed with the next level down. The State of Florida Dept. of Revenue also known as DOR. Fill out the Florida Dept of Revenue Sales Tax application along with $5.00 and submit your request for a STATE sales tax certificate. If you have not received your (ITIN) Individual Tax Identification Number yet, please enter ‘applied for’ and you will be given a little time to operate your business until it is issued. Once it is issued update the applications. Keep in mind that it does not matter where the sale is finally made, whether you are here in Florida or from another State or Country or half way around the World and booking and receiving rent revenue for this home, the tax must be submitted back here in Florida. The State and County’s position is that since the home is located here in Florida the money received is subject to a remittance of tax on the rental. It also does not matter whether you charged or collect a tax from the guest. You must calculate and remit a portion of the total collected for the accommodations and services to the State and County for the Sales and Resort tax. If your property management company uses an umbrella certificate for the State of Florida, please BE WISE and get your own numbers. The pitfalls of an umbrella certificate will be explained later. State level is the licensing process with the Dept of Business and Professional Regulations. The license that you will be applying for is with the Division of Hotels and Restaurants. You are in fact getting a Hotel License. The first year is $121.00 plus $50. application fee. Then it would be $121.00 for each renewal period. I do suggest that you BE WISE and get an individual license for your home/homes in your name only. The pitfalls of an collective license will be explained later. County Level Within the county your home is located in. There are subtle differences for Orange County, Polk County, Lake County and Osceola County short term rental laws. For the County of Osceola you will need an occupational license which is $30.00 per year for each home and also a Resort tax number which is $5.00 with the application and $5.00 for every change you make thereafter. I do suggest that you BE WISE and get in your name only, an individual tax number and license for your home. The pitfalls of an collective license and tax number will be explained later. City Level In this case, we will use Kissimmee within the City itself. You must obtain a license too. If you are outside the Kissimmee City limits but still in Kissimmee, there is no city license requirement for you. Subdivision Level The Disney area subdivisions have to be zoned for short term rentals or documented that short term rentals are permitted. You should register your home with your subdivision Homeowners Association and subscribe to receive the newsletter that they publish. These homes or units will now be operating as a business and you will be responsible for remitting Sales and Resort taxes on your rentals. We suggest that each home apply for and maintain their own individual numbers for the Sales Tax, Hotel License, Occupational License, and Resort Tax. This should be required for each individual home. Though some property management companys have chosen differently, try to operate your business as your business and keep control of your assets and money. There is no reason that a property management company should have control over your bank account and bills.

. Keep control over your assets and money! In today’s age of computers and high tech, your utility bills can come directly from your own bank account that you set up here in Central Florida. The set up fee or escrow deposit should go into your own bank account and every rental that the management company gives you can be deposited into that account to keep the funds flowing. Copies of these bills can be given to the management company to verify they are being paid but the management company does not have control over them. This becomes very important if you switch management companies. You will not be temporarily out of business until licenses and utilities transfer. Do it wisely from the start and you should have no down time. No lost revenues. No shut off utilities and new deposits being required. No new licenses needing to be paid for again. The reason we take this position is because although you might have selected a property management to look after this home, it is the home that is regulated and assessed. If there is a violation from any of the above agencies, the home and homeowner are effected. You as an owner are responsible for the actions of your property management company.

10 Questions You MUST Ask Any Orlando Property Management Company Before Hiring Part-2

6.  How many of your bookings come from tour suppliers vs. retail?

It’s very important you know about this.  Management companies get their bookings two different ways.  The first way is from a tour supplier; this is a fancy word for a travel agency. 80% of most of their bookings will come from a travel agency and you will not get the high rates that were quoted to you by the company.  Tour suppler bookings are always discounted because of the volume of bookings they send.  The other way they get bookings is through their direct efforts and marketing. This is where you will get the higher rates that are usually quoted to you on paper.  So keep in mind if the majority of your bookings are coming from tour suppliers the majority of your rates are going to be much less than the retail rates. 

7. Do you have a 24-hour emergency line?

In the event of an emergency (power outage, locked out, broken air unit, etc) it is absolutely essential to your guests that someone can be reached 24 hours a day.  Make sure to ask if this number rings to a real person or a pager. It’s best to have a real person on the other end of the phone.  Your guests will appreciate it much more and will be more likely to come back again if the service was good.

8. Are you located within 15 minutes of my home?

This goes with the question above.  If something were to happen and it required immediate assistance how long will it take someone to get out to the home? It’s best to stick with a company who is no further than 10-15 minutes away. It also makes it much easier for your guests when picking up keys.

9. Do you charge a cancellation fee?

Beware of these sneaky fees hidden in the sales contract.  There is usually a fee that is assessed to you if you choose to leave before your designated contract period.  A company that wants to lock you in and make you pay to leave is not a company I would recommend going with.  If you are not happy with the service and they are not delivering you should be able to cancel with reasonable notice and be released free of charge. Obviously if the company is doing their job properly and you are satisfied you will not want to leave. Be sure to find out their cancellation policy before signing that dotted line.

10. Do you have a quality assurance department?

This is a dedicated team of people that the management company has hired to go out and inspect your home before and after every guest arrives to make sure nothing has been stolen, broken or vandalized. If a company does not have a quality assurance person going out to the property before and after arrivals I recommend not going with that company. Too many problems could arise that you may not find out about until it’s too late.    

10 Questions You MUST Ask Before Hiring Any Orlando Property Management Company-Part 1

Before You hire just any management company to take care of one of your mostsizable assets there are some serious factors you should consider. Make sure you get the facts and  interview at least three companies before hiring one.  These are some questions you should always ask to help you navigate through the potential pitfalls that could arise form hiring the wrong company. 

 

1.How long have you been in business?

This is an extremely important question to ask because if the company is new or has not been around for at least 3 years you may run into financial problems within the company which means if they go out of business and your 3000 miles away, what happens to your home? Try to find a company with a track record to avoid this major pitfall.

2.How many properties do you manage?

Whether a company manages 10 properties or 100 properties the important thing to know is that they are equipped to handle the properties that they have taken on.  What often happens with management companies is they take on more properties than they can handle and in return you and your home get neglected. Too many houses, not enough staff. That’s a problem. 

3. Can you provide at least three references?

This is so important!  So many people don’t ask management companies for references.  You are hiring this company to handle probably one of your biggest assets, wouldn’t you like to know how their current clients feel about them first? If the company is unable to provide you with at least three solid references than I would strongly urge you to stay away from that company.  If they are making their customers happy then their customers will surely want to brag about it to you. 

4. Can you provide at least three booking reports for a home comparable to mine?

A booking report is a print out that shows all of the weeks a home was booked up for over the past year.  You can ask for specific ones comparable to the home you are purchasing or ask for a broad range of them.  Salespeople can lie about how many weeks your property will book but paper evidence will always show you the truth.  Be sure you get these before signing up with them.  It’s better for the company to quote you less booked weeks and book more than to quote you more and book less.

 5. What are your fees and are you willing to match other quotes?

Everything is negotiable.  Don’t let them take advantage of you because they think you have to make a decision before you go home.  Let them know you are shopping around and you are going to take the best offer.  Get all of your offers in writing otherwise, there is no way to prove that you have received better offers. Don’t make the mistake of thinking a lower price means better service. Be sure to take in consideration the track record of the company before going with a cheaper less reputable company.  You do get what you pay for.

The Orlando Short Term Vacation Rental Income Myth Exposed!

So you want to purchase a holiday villa here in the states and your plan is to buy it and rent it out to short term renters while your not using it. You have it all figured out, your estate agent has got you all excited about how you’re going to receive a cash flow on the property and it will pay for itself.

I hate to be the one to tell you this but they lied to you. It’s one of the biggest myths you are going to hear when you come to Florida to buy a vacation home.  Realtors and management companies often tell you this because they want to make the sale and they think it’s what you want to hear. It may be what you want to hear but it’s simply not usually true.

When you turn your property over to a management company to be rented out you can expect that rental income to only offset your expenses and reduce your payment but certainly not bring you in an income. With all the related expenses to management and owning a home it’s just simply not possible unless you pay all cash for the property and do not hold a mortgage. The reason being is that the average booking on a villa is about 20 weeks per year.  After you pay out taxes, management fees and cleaning fees there just simply isn’t much money left.  With bookings being down due to the economy it’s just not enough cash to cover all the expenses.

You should strongly consider your financial situation before you buy based on the full load of home expenses just in case. Beware of any agents or management companies that tell you any different, they are just trying to get you to buy.

Short Term Rental Property Facts In Davenport You Must Know About Before You Buy

This is so important in our area because 70% of our buyers right now are Foreign Nationals and their main objective is to purchase a property and place it under short term rental management while they are not using it.

I just got done speaking with a sales rep from one of the new homes communities here in Davenport.  He was giving me some of his marketing materials for me to pass on to my clients and was explaining to me about how his community is such a wonderful place for my Foreign National clients to buy in.  When I asked him if the lots were large enough for pools he told me that only some of them were but you could not put a pool in all of the models.  That is a huge problem because 90% of the short term management companies up here won’t take on homes without pools and the ones that do can’t really rent them. The last thing you want to do is spend $100,000 or more on a second home and not be able to rent it out to offset your expense.

To any prospective buyers out there who are considering purchasing a second home in Florida. I recommend you work with a Realtor who specializes in vacation homes so they can help guide you away from these potential problems.  The sales people at the new home communities are great but most of them are not aware of the key factors that contribute to a sound second home investment. Have your Realtor escort you to all of these communities that you are browsing.  The service is free and could save you thousands in the long run.

Hidden Expenses Your Short Term Rental Management Company Doesn’t Want You To Know About

 

I never wanted to be a whistle-blower but I just can’t sit back and watch good people get ripped off by property management companies on their vacation homes. Having worked for a management company briefly in the past and seeing what goes on behind closed doors I have a first hand view of the hidden expenses that most companies don’t tell you about when giving you their sales pitch. 

The first thing one does after placing an offer on their cozy, sunny holiday villa is shop about three or four property management companies to find a reputable company who is going to get their home rented out while they are gone.  The first question many people ask the sales rep for the management company is “How Many Weeks Can You Book My Property?” They are most likely going to quote you a lovely figure that sounds nice to you and entices you to want to turn your home over to them.  STOP! Before you start celebrating and getting excited you MUST know that 98% of the time this figure may not apply to your home.  It most likely applies to one or two particular homes they have under management that are rented like crazy and often because the owner is very active in the process. This doesn’t mean you are going to see those numbers.  Request booking reports on a home similar to yours to see what it’s really doing. 

This next part is the one you’re really going to love. . .so you want to know what type of rates they will be charging for you home?  They give you a print out with their rental rates on it quoting you low season and high season rates.  STOP! The rates that you are looking at on that paper are RETAIL RATES not wholesale rates.  Retail rates are what you will see IF the management company is able to book the stay directly through their website or marketing efforts.  This only happens on average 20% of the time!!!! The main way management companies get their bookings is through travel agencies (tour suppliers).  The tour supplies book their guests in your home at a discount of nearly 50% off the retail rates! The concept behind this is that they supply so much volume that it makes it worth it, and often time it does but beware!

So when they pull that pretty little rate sheet out and start quoting you these wonderful rates you now know it’s a sales pitch and you need to ask them, “What are your tour supplier rates and what percentage of your bookings come from that source?”Once you get that figure subtract the 13% state and county taxes off the top and then subtract whatever fee your management company is charging off the booking and you will then be left with a real figure that goes into your pocket. 

Lets just do the math: (these are just example figures not real figures)

Here is an example for a 3 bed Single Family Pool home in high season per week:

$665 (Retail, this is what they quote)
-13%= (Taxes for state and county, will vary among states)
_______
$575.55-
25%= (This is an average figure of what management companies charge per booking)
________
$431.66 (This is what you are left with on a Retail Booking)

Keep in mind the wholesale rates are 80% of bookings so even if the whole sale rate was only 30% less than retail you would be walking away with a figure closer to $300.  So you can see it’s less than half of what was quoted on your retail rates.

Now that you are armed with knowledge you can negotiate lower management fees on wholesale bookings.

How To Get Your Own Bookings On Your Davenport Short Term Rental Vacation Home

So you purchased, or are thinking or purchasing an STR (short term rental) vacation home in Davenport or possibly Kissimmee.  By now you’ve probably done the math and figured that a huge chunk of your expenses are coming from the property management company you are hiring to book it out and maintain it.  You tossed about the idea of how you could cut them out of the equation and save yourself money but you just don’t  know how you would get enough bookings to make it worth cost effective. I’m here to tell you that it’s possible.  You can get your own bookings BUT it’s going to take work, dedication and creativity on your part.   In order for this to benefit you be sure that you are either self managing the property or you have negotiated with your management company to not pay them anything out of your owner bookings (a cleaning fee is unavoidable).   

1. Create detailed descriptions of the property and location with tons of photos.  You can never have too many photos.  You NEED photos!!! Describe every bedroom, bathroom, kitchen, pool, patio, furniture etc.  Make sure you give as much detail and information as possible.  People love details, include room dimensions and how many it sleeps as well as the quality of linens and furniture.  This is important to people. I cant say this enough. . . INCLUDE PICTURES!!!!!!!!!!!!!!!!                                                            
2. Upload your photos with detailed descriptions to your favorite online photo hosting site.  For those of you not familiar with hosting photos online there are a number of site you can use to upload them.  Picasa, Flickr and Photobucket are just a few. This will create a place you can refer people to view the photos and you can also link to them.                                      
3. For the love of all things vacation home, please please please order a virtual tour.  This the web 2.0 era and consumers have much higher expectations these days than they did 20 or even 10 years ago.  You need to be able to compete with your competition.  If you’re not sure how to get a virtual tour for your Florida vacation home here is a site you may want to check out Obeo.                                                                                                                               
4. Set up a property website. Godaddy has some very cost effective options as well as Hostgator. Be sure you include your contact information on your website and a valid e-mail address because most of your inquiries will come through e-mail.                                                                                                                  
5. Once your website is up you can then start submitting your listing to vacation rental sites.  One of the biggest and most popular sites is  HomeAway Vacation Rentals. From here you can upload your listing (for a fee) and create a booking calendar to show availability.  You may want to make sure you keep it in sync with what ever bookings the management company has for you so you don’t make the mistake of double booking.           
6. Be sure you place ads on Craigslist.org classifieds at least once a week.  Some other great free classifieds sites are: Pink Flamingo Classifieds,  Ablewise and US Free Ads.                                                                                            
7. Network with real estate companies that fly buyers in from out of the state and country.  Tell them they can rent your villa for their buyers and offer them a great deal.  If you get in with the right office you may have a small gold mine on your hands. 

The most important thing to remember when getting your own bookings is that it’s quality not quantity.  For management companies it’s the opposite because they deal in volume but only get a very small portion of the revenue because of overhead expenses.  You will be collecting 100% (after taxes) of your nightly revenue so what you may earn on 10 booking could easily add up to what would be 20 bookings through your management company. That means less wear and tear on your home for the same type of income.  A great book to check out is: How to Rent Vacation Properties by Owner Second Edition by Christine Karpinski.