At Resort Rentals, we always strive to be as straightforward as possible with our fees. Unfortunately, this isn’t the universal practice in the market, even among some St. Pete Beach property managers.
Whenever we come across other property management companies in St. Pete and Coastal Florida asking for a lower commission than ours, we become a bit suspicious. That’s why we always advise the owner to do their homework.
For property owners, it’s wise to take a second look at the terms. Some companies like to hide fees, which leads to owners netting far less than they would with our property management company.
Property managers often employ many tactics to boost their profits while their clients remain unaware of these practices. Even some of the biggest names in our industry use these methods. We prefer not to name names, but you might be surprised by some of these major players!
Coastal Florida vacation property managers are a great help to your rental investment business, but you need to stay alert and pay attention to all fees and charges. Pictured: Sand Dunes Town Home in Treasure Island
What is “rent-seeking”?
Rent-seeking is the act of attempting to boost one’s own profits without providing any additional value to whomever is paying. In the realm of property management, rent-seeking typically translates to ‘hidden fees.’
Property managers use hidden fees to claim a larger portion of your profits than is fair. We see it happen way too often and rental property owners are often oblivious to these practices. It also happens that, sometimes, some of the fees that directly impact your profits are rather clear, but they will fall into this category.
In this blog, we’ll go over what some of these hidden fees are and how you can steer clear of them.
But first, a disclaimer…
Property managers are a great help
Yes, some property managers may attempt to claim more than they deserve, but, as a rule of thumb, the benefits of entrusting them to manage your properties will outweigh the risks.
Having a skilled property manager will relieve you of the heavy burdens of owning and managing a beach rental property. They’re also likely to increase your rental income. After all, property managers like us excel in keeping your beach rental consistently booked and have the expertise needed to attract more renters.
Besides, they’ll continually optimize your nightly rates, handle urgent and unexpected issues, and safeguard your beach rental investment through regular inspections and maintenance.
If you have been self-managing your properties, you probably know the substantial amount of work that’s involved.
When it comes to finding a company to do it for you, you just need to stay alert, find someone trustworthy, and learn how to avoid hidden fees. With a smart approach, the benefits and profits will surely follow.
How property managers rent-seek
With many of the local rental property management companies operating in coastal Florida, you’ll likely pay them 30-40% of your gross income for full management.
Bigger, national managers can be a bit more affordable. In this blog, we’ll focus on this national crowd that offers better services.
Here are the rates that the top management services typically charge:
- Vacasa: 15-25%; fully managed.
- Turnkey: 15-25%; fully managed.
- Evolve: 10%; partially managed.
You can use these fees as a benchmark for the industry. However, as we’re about to discuss, there are hidden fees that you shouldn’t have to pay, but some companies may make you pay nonetheless.
Here are some examples:
- Booking fee: Evolve and Vacasa charge a 3% and 10% booking fee, respectively, while Turnkey, on the other hand, has no booking fees.
- Damage insurance: Vacasa asks for $30 per stay, while the others charge nothing for damage insurance.
- Guest supplies: Evolve’s fee is $225/month, Vacasa has a $90 hot tub fee, and Turnkey VR’s fee is $90/month.
Other hidden fees you might encounter with competitors include repair and maintenance fees, business tax fees, and credit card fees. These fees can add up quickly, and you can easily lose 10-15% of your revenue by having to cover them alone.
Avoiding hidden fees
You got this far, so you probably have a clear understanding of how this rent-seeking game works.
The question now is: how do you avoid it? The best way to steer clear of unpleasant surprises is by asking the right questions before signing with any property management service. Here are some things to ask:
- What property management services are included in your fee?
- Do you also charge management fees for vacant rentals?
- Could you please explain the full criteria that determine your nightly rates?
- Are there any extra fees I should be aware of on top of your management fee?
The last question is crucial if you genuinely want to avoid hidden fees. There’s no need to beat around the bush when asking this straightforward question, and you should expect an honest answer. However, even so, sometimes managers may not be willing to disclose everything upfront.
The alternative to this challenge is to find a trustworthy company that doesn’t charge any hidden fees and will be upfront about it from the very beginning.
Vacation property management services may hide fees to boost their profits, so it’s essential to find a trustworthy service and ask the right questions. Pictured: Sunset Beach House in Treasure Island.
Look for a trustworthy property manager with no hidden fees
At Resort Rentals, we’re entirely guest-focused, and we have absolutely no hidden fees.
With us, guests are the ones who pay for cleaning and taxes, and as an owner, you won’t be charged for bookings, guest supplies, or any of the other items mentioned above. We want to make that very clear right from the start!
Saving an extra 10-15% on property management fees sounds fantastic, doesn’t it? Maybe now is the time to double-check if you’re really not losing money with your current management.
