Local vs. National Property Management Companies - The Choice is Clear
If you own a second home and are looking for a property management company, you have many choices. Among the many things you need to consider is deciding if you want a national or local company caring for your home.
While national vs. local may seem to be low on the list of what's important, you may be surprised to learn that there can be some critical differences. Differences that can effect how your home is cared for, your revenue, and the amount of influence you have in achieving your goals. In recent years, several new national companies have burst onto the market like TurnKey, Vacasa, and Evolve. Some offer incredibly low commissions and guarantees, while others promise to help owners book their own properties. There are things that need to be consider before choosing a national company.
1) How can these companies offer such low commissions?
The simple answer is they can't. The cost of labor, materials, rent, etc. drives the commission rate in many cases. While there is often a disparity between locals firms, this can usually be explained by efficiencies and the underlying revenue model. Companies that are offering rates of 20%-30% lower than anyone else should be looked at skeptically. The reality is that they charge a lot of fees including credit card fees, supply fees, media fees, etc. They rely on contractors to do most of the work as a way to reduce their cost. This translates to less control and more issues for your home. If you think it sounds too good to be true, it probably is.
2) How are these companies growing so fast?
They are heavily funded by outside investors, typically private equity and venture capitalists. Why is this important? Because you have to look at how they price their services, their heavy debt load, and how they plan to eventually make money. It reminds me a bit of the dot coms of the 90s. It was easy to start a company, secure a lot of money through investors, and then get out all before you had to make a dime in profit. These companies work the same way. They are being built quickly to sell. You might sign with a Vacasa today and end up with Wyndham tomorrow. The issue here is that your 10% commission will suddenly become 45% commission under the new model.
3) They say they have local staff, what is the difference with a local firm?
They typically hire local contractors to do most of the work. occasionally they will have a local sales rep that you will never see again once you sign. Their staffing has very high turnover so once you establish a relationship, they leave. I recently spoke with a homeowner that was very interested in signing with us. That is until she spoke with one of the large national firms and they offered her a very low commission. She signed with them and after a year I received a call. She was interested in signing with us after a very bad experience. In this case, their local rep left after 4 weeks and the new rep lived over 100 miles away. A couple of months later, that rep left and the new rep was out of the corporate office in Oregon. Her property is in Breckenridge, so having her "local" rep in Oregon made no sense. On top of that she had significant issues with guest damage, bad reviews, and her revenue numbers were horrible.
4) What about the guarantee?
Guarantees are great so long as you understand the fine print. Many national companies are offering owner guarantees stating they will beat your current revenue numbers or the will refund their management fee. Sounds great, but what they don't say is it is very difficult for them not to deliver based on the way they calculate the previous revenue. To be eligible you will need to provide them all of your owner statements from your previous company. They will analyze the statements and "normalize" them to make an apples-to-apples comparison. They will assign unreasonable value to any owner usage and by the time they are done with the math, they will not fail to hit their target. I have spoken to tons of homeowners that have had these guarantees and I have yet to hear of anyone being refunded a management fee...even when the revenue numbers were lower. Lesson, don't fall for this one.
Obviously I am biased. I own a local property management company in Breckenridge, Colorado and I am proud to be a local. The value of being local is huge to owners and guests. I am in the office everyday and I listen to our guests and their questions...and they have a lot of them. Without being local, how would we ever answer their questions? From what's the weather like today, to can I fit 3 cars in the driveway, to does the property have a crock pot. The benefit of being local is that our staff have actually been in all of our properties, they know them, and more importantly they can answer any question about them.
When we have a property emergency like no heat in the winter, burst pipes, and any one of a hundred things, we are right here and can respond within minutes. We are not reliant on contractors to do our job. This gives us the unique position to be able to care for our homes. Caring for our homes, our guests, and our owners is a cornerstone of our business. Without being local, we cannot provide the level of service the owners and guests deserve. Imagine a guest calling to find out about a place to eat, if we've had snow lately, or what the view from the home is like and they are talking to someone in a call center 2000 miles away.
Not all companies are created equal, but one of the things I like most about SkyRun is that we have the buying power and presence of a national brand, but are all locally owned and operated. This hybrid model provides for the best of both worlds and enables us to deliver excellent service to our guests and owners.
About SkyRun Vacation Rentals – Breckenridge
SkyRun Breckenridge is a award winning full-service vacation rental property management company based in Breckenridge, Colorado. Founded in 2009, SkyRun provides professional rental & property management from studios to large luxury homes. SkyRun provides superior accommodations with convenient ski-in/ski-out and in-town locations throughout the town of Breckenridge to quiet peaceful escapes in Blue River and North Breckenridge. SkyRun Breckenridge is veteran and locally owned and operated; our goals are to create the ultimate vacation experience for our guests and provide unparalleled owner and guest service and support.
⇒ Voted #1 Property Management Company in Summit County, Colorado
⇒ Town of Breckenridge Service Champion Award Winner