Vacation Rental Management – What am I Paying You For?

Hi Property Owners, I need your input and help on a very real issue we’re wrestling with. Everyone who manages a vacation rental property on behalf of another faces this, but many sweep the issue under the rug, or ignore it altogether. This issue?

Property Management. This includes things you normally would need to take care of your property if you lived there, but also all the myriad of property services that Guests need while staying at your property. Here’s a small sample of the needs of a property:

  • Monitor roof, windows, and basements for leaks.
  • Clean out blocked gutters.
  • Clean up the yard, cut back hazardous tree branches, trim bushes, cut the grass, mulch, weed the driveway, pull out encroaching ivy…
  • Take care of the trash and recycle – putting out the cans and bringing them back in.
  • Handle cracked, broken, or loose pavers.
  • Inspect decks for wear and tear.
  • Clean out air registers and ducts.
  • Change HVAC filters.
  • Test smoke detectors and change out batteries.
  • Change out burned out light bulbs and light fixtures.
  • Schedule, coordinate, and sit contractor appointments.
  • Perform cable and WiFi equipment installations.
  • Monitor and fix simple plumbing issues.
  • Coordinate with HOA and Condo Associations for community property manager work scheduling and property access.
  • Respond to alarm company calls.
  • Sit furniture and other delivery appointment windows.
  • Open and close properties each spring and fall/winter.
  • Check on properties ahead of bad weather warnings. Securing the properties and outdoor furnishings.
  • Walk through a property at the beginning and end of the main rental season – testing all appliances and property amenities to ensure in working order; checking on condition of furnishings and fixtures.
  • Sit municipality Building and Licensing inspections.
  • Power washing properties, outdoor furnishings, decks, and paths.
  • Coordinating with home warranty, appliance warranty, and service plan providers when an appliance, HVAC, or anything at the property under such protection fails?
  • Providing 24/7 after hours emergency support for Guest stays.
  • Working quickly to find replacements when something breaks during a Guest stay and we want to avoid a costly refund/compensation to the Guest.

The compromise that Seachange Vacation Rentals has brokered with our Property Owners has been to provide basic property management services centered around the Guest stay. If something breaks we go to the property and coordinate a replacement or get the problem fixed.

However, there’s more to Seachange Property Services – we don’t just react to property needs, we proactively monitor for nascent property issues by sending our Turnover Agents to every property before and after every stay. We are unique in our area amongst vacation rental management companies for doing this.

We do this for three reasons:

  1. Damage checking and damage resolution.
  2. A light re-staging of the property since Guests always rearrange furniture and contents of cupboards – we want the property to look the way it does in the listing photos when a new Guest arrives.
  3. Maintenance inspections – our Turnover Agents perform a basic check of the property and note anything that may be starting to fail, or they fix it on the spot if it’s a simple issue. We address issues ahead of them becoming a larger, more expensive, vacation interrupting, refund causing problem. We do not bill for our Turnover Agents. Seachange absorbs the labor costs and includes this service in our management fee (commission) we deduct from the Gross Rent.

Not only are we currently handling emergency property services and property management issues at the properties, but we’re also performing proactive property maintenance checks at each Guest (or Owner Time/Owner Guest) departure and arrival. When properties sit empty for any length of time we also routinely perform spot checks on the properties to get ahead of any problems. When bad weather is expected we go to properties and secure them. Then we return later and reset the properties.

All of the above emergency and proactive property services are performed without additional charge. They are included in your management fee (commission).

The big secret hidden in plain view in the vacation rental management industry is that many companies do not perform much if any proactive property services, or property management. An issue progresses to point of failure and is dumped on the emergency after hours on call support. Sleepless nights and busy days are spent coordinating not only a fix at the property, but often negotiating a re-housing of the Guest, cutting short a Guest stay, or having angry Guests endure a less than happy vacation time in a property experiencing a major maintenance failure.

So Andy, what do you mean by Property Services. How is that different to Property Management? Broadly speaking:

Property Services = Reactive.

Property Management = Proactive.

elephant in the room cartoon

You will appreciate that Seachange is already providing much in the way of ‘complementary’ Property Management beyond basic Property Services. In good conscience we have no option not to. We cannot ignore the elephant in the room. We just cannot let a property in our care deteriorate to the point of failure. It always costs an Owner more in the long run.

Here’s the issue for Seachange. Simple, quick Property Services calls often build into longer, extensive Property Management issues. We have to lose Agents from the office which backs us up on busy days.

So how do we separate Property Services from longer time frame, more complicated Property Management? As indicated above, we use Guest stays as a divider. Property Services are centered around issues that crop up during a Guest stay and proactive routine maintenance inspections before and after a Guest stay. Our service model always has been to include the first hour of any Guest call complementary as part of our management fee/commission. Most issues, even if we have to visit a property are resolved in one hour. If an issue results in a more complicated resolution beyond one hour we consider this to be Property Management and we bill our Owners an hourly rate to recover our cost on this support. Nothing new there. Hopefully that is no surprise to any of our Owners. It’s all there on your bi-monthly statements.

Here’s why I’m bringing this up:

  1. Consistency of Billing – in the interest of ‘customer service,’ Seachange has not been consistently billing our Owners for Property Management. We have been absorbing the cost and then when an issue becomes really time consuming, billing for part of it.
  2. Scalability and Scope – Seachange is becoming overwhelmed with the increasing volume of Property Management and, to a lesser extent, Property Services support tickets. Resolving these issues is taking key staff out of our offices for much of the day, seven days a week spring – fall.

I’m getting concerned that setting and managing Owner expectations regarding Property Management is straining resources that should be focused on vacation rental management.

What is, “Vacation Rental Management” and how is different to, “Property Management?”

Vacation Rental Management is Guest centered. Property Management is, Property centered. Clearly we can’t have one without the other. Vacation Rental Management is anything we do for our Owners that results in and facilitates a Guest stay:

  • Consulting with Owners on how best to stage their properties for maximum revenue and Guest appeal.
  • Marketing the property which includes all of technology and marketing projects on our website, and other listing sites such as VRBO.
  • Finding, screening, and booking Guests.
  • Facilitating the Guest stay from pre-check in through to post-departure.
  • Facilitating the reservations process for our Owners. This covers front of house (housekeeping – bedding, linens, cleaning, and coordinating Guest access and parking) at the property level and back of house (accounting and billing, tax reporting, training). It also covers staying abreast of vacation rental industry rules, regulations, and developments to protect our Owner’s investment.

I’m getting concerned that we might not be providing the service level or consistent quality control expected of our brand. A Property Services Guest call regarding a minor plumbing leak at one of our properties this week developed into a two week multi-Guest, and neighbor interrupting issue. This extended well beyond the complementary support we include in our management fee. We billed the Owner for part of our time on the issue.

As I said above, most Guest calls are handled within one hour. Here’s how:

  • Guest calls in an issue to the office or emergency after hours number.
  • Depending on the issue, Agent either verifies the problem with the Guest over the telephone, or visits the property to confirm.
  • During business hours, Agent notifies the Owner as a courtesy.
  • Agent pulls out our rolodex of vetted licensed and insured contractors, sets the contractor appointment, and hands the issue over to our administrative support team to coordinate, and keep all informed. We don’t bill for the time involved in any of that since our administrative team is staffed and resourced to handle this from the office.

The Owner involved in this plumbing leak problem questioned the hourly billing for this protracted issue, and asked a very reasonable, very polite question, “I thought I was already paying you for that? What am I paying you for?”

Interior design for vacation rentals
Insert lightbulb moment here.
Pause for dramatic affect…

Ding! Lightbulb moment! Remember back in 2019 I reorganized Seachange? I separated out Reservations Sales (Vacation Planners) from Operations implementing separate staffing and appropriate compensation plans for each. Why then can’t I (we) do the same thing with Property Services and Property Management. Why not formalize Property Services and Property Management into its own Seachange department? Let’s simplify it and just call it Property Services so we don’t get confused with those irascible Property Managers at residential communities!

Announcing Exciting News!

I’ve opened up a new position in the Seachange senior management team. This new hire will be tasked with building out a new Property Services division and, eventually a new Housekeeping division. This will be a direct report to me and we will be working closely together this fall and winter to make this happen. This position will also include business development to bring in additional new property listings to help us offset the payroll of this new position. Stay tuned as our new Director of Property Services flushes out this concept.

Will I get billed for this new Property Services work? We will continue to follow our model of first hour complementary. What will definitely improve with specific staff assigned to these Property Services roles is our ability to communicate with our Owners, agree, set, and manage expectations of longer timeframe, more complicated property issues, make efficiencies in our work, and improve the accounting process.

I alluded to Housekeeping as a future inclusion in this department. I make no secret of my desire to bring Housekeeping in house (no pun intended). It’s no coincidence as vacation rental management companies evolve that they end up hiring their own cleaning, bedding, linen, and laundry staff versus sub-contracting out. It allows the vacation rental company to control quality and consistency of deliverables. Watch this space.

Thank you for your time and attention on this important message. Please email or call me with your feedback and questions (302) 727-5566.