I left you thinking about how to respond and deal with your homeowners who are upset about declining bookings. Don't forget about the article I shared with you, which is a guide for your Homeowners, A Guide for Vacation Home Owners in Crisis: What Not to Do/Expect If Your Home Is No Longer Affordable. Download HomeOwnerGuideArticle
Some other things that you should really consider are...
Should I Move My Home to a Better Rental Manager?
Perhaps, if you have a bad manager. But…
- There are good reasons why only 5-10% of rental homes turn over;
- Distinct types of inventory prospers in different rental program;
- Each company is patronized by a pool of renters with specific interests;
- Managers who charge more attract renters who pay more;
- More bookings from aggressive rent discounts doesn’t mean more revenue;
- If you do switch, its hard to know if you made the right move;
Should I Move My Home to A Manager Who Does Less But Charges Less?
You might if you are sure you and your home’s renters are “over served ” and paying for services that aren’t wanted and don’t generate more rental income.
- There are a growing number of managers who do not offer full-service;
- But high-end programs bring other benefits;
- You may not know what your manager brings until you leave;
- Also consider resale value of your home.
How Do I Deal With Discounting?
This is tricky. Today, however, prices float with supply and demand. So it is important that you give your manager authority to change the rent. The Internet forces change:
- It has allowed consumers to see and exploit our industry’s high vacancy rates;
- It has generated a host of rent-by-owner sites and aggressive discounts;
- The concept of “discounting” is becoming outdated by “dynamic” pricing;
- Homeowners are desperately bidding for renters, forcing prices down;
- The Internet allows renters to quickly compare prices, and to find “specials.”
- So rent-by-owner listing sites and managers’ specials pages set daily pricing;
Should I Expect My Rental Manager to Share in the Discounts?
The answer is “no.”
- If your manager splits the rents (commissions) he already shares in discounting;
- It won’t be in your interests to push rental managers to take a bigger share;
- Most can’t contribute without reducing the service levels you need today;
- Market cycles are a normal investment risk, and not your manager’s doing;
- Mangers don’t share profits so they shouldn’t be asked to share losses.
Is My Manager Ripping Me off with Add-On Fees?
Don’t put too much energy into this.
- Fees have been forced on managers by the competitive market place;
- Commission rates are no longer adequate to cover cost increases;
- Homeowners prefer add-on fees over commission rate increases.
- These fees subsidize the money you pay for services;
- There are no excessive profits in the vacation rental industry.
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