Vacation properties are sound investments because they can be put up for rent, sold for a higher price, and used at the convenience of property owners. However, there are also drawbacks in this kind of investment, as maintenance and associated fees are required.
If you own a number of properties but don’t have time to take care of tax, legal records, and maintenance issues, then hiring property managers is a smart decision. This guide will teach you more about how much you can expect to pay for vacation property management.
What Is Vacation Property Management?
Property management involves overseeing a residential or commercial property, seeking tenants, and collecting monthly rental payments. For vacation properties, dealing with structural issues, booking services, guest communication, and contact are part of the job of a property manager.
Average Cost of Vacation Property Management Worldwide
The cost of vacation property management in the United States ranges from 20 to 28 per cent of the monthly rental. If the monthly rental costs around $5,000, then you are looking at between $1,000 and $1,400 in management fees. Meanwhile, in Canada, the cost of this kind of service is between $100 and $400, depending on the size of the property.
Sydney-based vacation properties charge depending on the suburb and local market value. The average cost for property management ranges from 5.5% to 12%. In the UK, the cost can be between 12% and 20% of the total monthly rent.
Vacation Property Management Cost Breakdown
Coverage for the vacation property management cost includes any type of cleaning and maintaining. Sometimes, advertising fees are already part of the cost, but this will depend on the property manager. Moreover, managers also conduct tenant screenings for long-term rentals and comprehensive accounting. Tax documentation is also provided, with an organized reporting system for the landlord’s record.
Factors Affecting the Cost of Vacation Property Management
One of the factors affecting the cost of the service is the size of the property and the requirements of the landlords. For instance, if the vacation property is too far and the owner cannot visit often, all the maintenance concerns must be solved by the manager. Given the scope of the job and the time this can eat up, some managers charge higher than 20%.
In addition to this, the location of the property and its value contribute to the cost of property management.
Additional Costs Associated with Vacation Property Management
There are unexpected fees that you need to consider when hiring property managers. Miscellaneous fees that cover the annual inspection fee and setup fees are expected. Moreover, insurance can also be availed separately, which contributes to the cost. There is also what's called an ‘initial fee’, which covers the advertising fee needed to find tenants.
Conclusion
Overall, vacation property management helps landowners get a return of investment by looking for long-term tenants. In addition to this, managers also take care of the property by addressing structural concerns to avoid costly damages in the long run. Finally, legal records and taxes are also managed by these professionals; hence, property owners can rest assured. You can expect to pay anywhere from 20%-30% of the cost of monthly rent for a good property manager.
