Top 30 Questions to Ask before hiring a Property Management Company
Considering a South Padre property management company? Asking the right questions matters. When having the best list of questions to ask, selecting an reputable property management company is much easier. Here are the 30 best questions to ask a property manager on South Padre island before you sign.
1. What services do you offer clients?
Managing a potential vacation rental property comes with many responsibilities to the VRM ( vacation rental manager ) .
- Prepping the property professionally to ready it for short term guests.
- Including professional photography to attractively display your property
- Filing for & maintaining your City of South Padre short term rental
The City requires if there is a complaint you must respond within 1 hour with a rental agreement and in person representative at the property or you can lose your rental license. - Filing & correctly paying your Hotel/Motel occupancy taxes due on your SPI Rental – you will owe 6% to State + 11% to Local & County tax authorities monthly. (The filings are a massive nuisance BTW)
- Providing maintenance & housekeeping services. If they do, do they use contractors OR do they offer these services from their own employees thus assuring better quality? Renting south padre condos & houses is the easy part!
- Listing your property attractively on all the major OTAs like Airbnb, VRBO, Expedia, & booking.com as well as connecting these bookings to one centralized calendar
- Offering an online booking engine on their website for direct bookings that save OTAs fees is a major “must have.”
- Handling owner use & owner block offs with an online owners portal
- Providing excellent guest communications & services
- Issuing detailed monthly statements you can actually figure out & transferring money to you in a timely fashion via ACH each month
2. What is your level of experience in the vacation rental management
industry? Ideally, I’m seeking a company with several years of specific property management experience to ensure they have a solid understanding of the market and proven strategies for effective management. Look at their website. Is it professional? Does it look like this is the focus of their attention or are they just Realtors moonlighting as a property manager?
3. How do you determine the correct rental amount to charge for properties under your management?
You should be looking for a property manager who can provide a comprehensive analysis considering factors such as comparable listings, local amenities, property features, and market trends to optimize rental income. There is no magic wand to setting rates with software! Run – do not walk way but Run – from any property management company that uses static pricing instead of dynamic pricing.
Static pricing is where they set rates by season and do not adjust based on pacing, demand, or what the competition is offering. Dynamic pricing alternatively is where there is very regular & constant rate adjustments to fill your calendar & occupancy level.
4. How many vacation rental properties do you currently manage?
work with a management company that maintains a balance between workload and attention to ensure quality service.
Typically, managing between 40 to 90 units is considered optimal. Not so small as they do not have sufficient staff to assist your guests – and no so large that your property is simply lost in the mix of all the others they push.
Side Note – You should not hire a ‘moonlighter’ ie these are usually Realtors or Real Estate agents that sort of flopped at that career, there is a market downturn, and they start “managing property” to make ends meet. Very iffy choice as not only do they not have the infrastructure to maximize your rental income and maintain your property – they drop property management the second the market picks back to list and sell homes. They will lack a solid website, will manage 1 to 15 properties & will lack a lot of basic technology needed under the guise that they are “boutique.” Far from it.
5. Are you affiliated with any professional organizations in the vacation rental management industry? Does the Owner or General Manager have any Tourism Board or Chamber experience? Being well connected in the community can help fill your calendar too as they will get direct referrals.
Know by now that you may want to see if South Padre Trips may be a good fit to manage your property?
for more info on the best South Padre Property Manager
6. How many staff members are on your team?
Seek out a management company with adequate staffing to ensure timely and efficient service without being overwhelmed by a large client base.
Example giveaway of a “rookie” or moonlighter for a VRM (vacation rental manager) are no office open to the public. Additionally, ask questions such as who is your Director of Maintenance? (hardest part of property management is maintenance on an Island) – How many housekeepers do you employ? (rookies employ zero – it’s all contracted housekeepers which usually means poor reviews from guests and subpar work as they are in a big hurry.
7. What type of insurance coverage do you carry?
It’s crucial to verify that the management company holds appropriate insurance coverage, such as General Liability. One of the biggest reasons to hire a professional property management firm is it greatly reduces your liability in the case of a lawsuit as for one, your guests will have signed a rental agreement and for two, this firm will have its own insurance as well.
8. Are there any fees associated with terminating the management contract?
Clear understanding of termination terms matter. A reputable firm will have a 1 year agreement, and generally will have a 30 to 90 day term you must honor reservations if you cancel as no one wants disappointed guests. Most importantly – what happens if you decide to sell?
Do not accept any company that will charge you to terminate.
8. Are there any fees associated with terminating the management contract?
Clear understanding of termination terms matter. A reputable firm will have a 1 year agreement, and generally will have a 30 to 90 day term you must honor reservations if you cancel as no one wants disappointed guests. Most importantly – what happens if you decide to sell?
Do not accept any company that will charge you to terminate.
9. Who owns this Company and is in charge? Who will be your Owners Liason if you have questions or concerns?
There are a lot of “national” rental agencies promising the world, yet the minute you agree to have them manage your Company you are offloaded to some assistant out of state. If you have a $500,000 or $1 million home, it seems ridiculous you would trust that amount of money to an assistant to anyone doesn’t it? You have a lot of money on the line!
10. Can you provide references from clients?
Reviewing testimonials and references can offer valuable insights into the management company’s reputation and performance. It is not that you need to call or email their current clients – but you can gauge how readily they can provide references. If they hesitate or dodge it in any way, well – that’s a big big red flag of course
11. How well-versed is the Company with short term vacation rental regulation and local ordinances?
Compliance with regulations is paramount to avoid legal issues and ensure fair treatment of tenants. On South Padre Island, you must maintain a Short Term Rental License with a fee currently of $119 per year that the owner pays. The Management Company should be collecting and doing all of the local and state occupancy tax filings for you. If they do not – look – hire someone that does. It’s a nuisance to say the least.
12. What types of vacation rental properties do they specialize in managing?
Experience in managing properties similar to yours ensures familiarity with specific challenges and requirements.
13. Do you markup on repair and maintenance services? Transparency regarding additional charges for maintenance services is essential to assess the overall cost of management. A fair rate on hourly maintenance work matters – but even more importantly are there flat rate charges even if nothing is really done? For example, changing light bulbs, batteries and furnace filters?
Seek a Management Company that has “pass thru” invoices on services they contract for you on your behalf they do not offer. This means if the pest control company charges $55 per month – you get billed off your owners statement at the $55 rate, not at $55 plus their 30% commission.
In Texas, unless they are licensed, bonded & insured as required by the State of Texas for these services, the firm should be not be engaged in providing them.
This includes: HVAC (AC & Heat) / Plumbing / Pest Control / Electrical
Many firms also will not handle, but contract out:
Lawn Care
Pool Care
Ask these questions up front, because if you have a stand alone home, this all adds up at the end of the year.
14. Does the firm require Homeowners / Hazard insurance for the interior of the property and to what amount?
If they don’t mention this nor require their firm to be named on the policy for this “slip and fall” coverage they simply don’t know what they are doing! This opens you up to tremendous liability. One of the main functions of a professional property manager is limiting your liability as an Owner. You want to be protected from from potential liabilities. Whether you select South Padre Trips or not, this type of insurance should be NO LESS than $500,000 with a recommended coverage of $1 million
15. What level of control do you want on rate setting?
Be aware, a VRM doesn’t make money unless the property rents. High control owners may not be ok with the PM deciding rates, minimum nights, and the like kind of management. Your ability to give up control matters if you want to maximize revenue. If you cannot, and the management firm lets you set the rates – likely you are missing revenue without hard data and experience to set rates.
Awesome companies are not going to let you as the Owner set the rates. If they do – again, likely red flag not to use them as they are simpliy desperate for ANY units to manage!
16. What is their process for guest screening to ensure the best quality of guests possible?
One big sign of this is if the Company requires a signed rental agreement (may be E sign – if they don’t have E-Sign warning that this Company is not technologically up to date). If the VRM you are considering relies on Airbnb or VRBO boiler plate style rental agreements – you can land in real hot water on problem tenants.
17. If there is a problem guest, what does the management firm do?
Who and how do they evict short term people throwing parties, too many cards, complaints, etc? Their process to do this matters. Do they have staff available 24 hours a day to comply with the City of South Padre Rental License if there is a complaint on your property? If they do not, you could lose your right to even conduct short term rentals on the Island – and not just with that Company – overall as an Owner!
18. What is your average response time for owners with questions/issues?
Prompt communication is essential for addressing concerns and maintaining your satisfaction as an Owner. Do you get ONE person as your contact, or is it part time assistants? Who is actually in charge if there is a real situation and how quickly are you guaranteed a response in an emergency?
19. How do tenants contact the Property manager for assistance or maintenance requests?
A streamlined communication process facilitates efficient resolution of tenant issues. The company should have a software system in place to manage this. Ask what one it is. If none – lacking tech is a bad sign
Know by now that you may want to see if South Padre Trips may be a good fit to manage your property?
for more info on the best South Padre Property Manager
20. How often do you get paid? When? How? What does a sample statement and transaction detail as well as charges to your account for maintenance look like?
Get an example to make sure you like what you see and it is understandable. Being frustrated each month because you cannot figure out what rented and what you are to be paid and/or charged for is a nuisance that won’t just go away
21. What do they know about the seasonality of the South Padre Island beach market?
This is a very important question to figure out and dig deeper if they actually know the market or not.
22. How long are vacation rental properties typically vacant between tenants based on season?
Minimizing vacancy periods maximizes rental income and property utilization.
23. What is their most common type of guest?
Ask demographic info. This is a double edged sword – companies that seem too restrictive will for sure cost you revenue $$. For example a small Property Management Company may simply lack the housekeeping staff to do quick turns and therefore MUST restrict Sunday check ins or implement a 3 or 4 night minimum stay.
WOW will this cost you big money! Usually longer than normal minimum night stays has nothing to do with preventing parties, and everything to do with the fact that Company has mismanaged housekeeping or is simply too small to turn your property fast enough on check in and check outs.
TIDBIT: Minimum not stays do not mean less wear and tear. They usually mean more. We can prove this too. There are exceptions to this – for example, summer peak weekends on Saturday nights you generally do not want to accept 1 night stays. That can spell parties on the Island. But..not always. We have this figured out.
24. What is their percentage of direct bookings? What is their percentage of repeat clients?
We recommend asking this as open ended questions and let them expand. It may give you valuable insights.
25. What marketing strategies do they use to attract guests beyond simply having it on OTAs like Airbnb, VRBO, etc If they fumble this question, it means they have none and are not going to get direct bookings that are more profitable. Effective marketing strategies can swing a property revenue +/- 10 to 20%
26. How does the firm ensure against damages?
To what dollar amount are they or guests responsible for damages? Who pays, who collects, etc. Same question pertaining to excessive cleaning needed. Generally we have found large national rental agency type companies offer the sun, moon & stars (ie everything is always covered like you won the lotto style) but when it comes to them actually paying out on it, you’ll find it is easier to fly to the moon!
A clear, easy answer is what makes sense. They should cover $ X amount as the acting property manager, and rest they collect by a 3rd party damage coverage insurance the guest paid OR a refundable damage deposit. Clearly a completely destroyed property IS possible – there are horror stories about people that did Airbnb without property procedures to ensure up front against damages. This question and how the prospective PM handles it is a real key insight to if you should hire them or not.
27. What are your pricing options for property management services?
Understanding the fee structure helps assess the overall cost of management services. It doesn’t make sense that a $2 million beachfront home pays the same % on rentals as a $150,000 efficiency condo. While the beachfront home does take more work, the rental revenue will be 7 to 10X what the efficiency condo is. GET IN WRITING all that their fee includes. Common hidden fees:- Credit card fees – you pay as Owner 2.5 to 5% for the firm accepting a credit card. Math gets confusing to say the least
- Linen fees – you pay for a “linen package” each year of $150 to $300. A quality firm should be including towels, sheets, and pillow cases as part of the deal.
- “onboarding fee” to actually start using that management company you will get charged a fee for photography to paperwork.
- Upcharge a percentage of any contracted services. For example, the plumber goes it’s $105 invoice and they mark that up 10 to 30% for “contracting it.”
28. Are there any additional fees or charges beyond the management fee?
Transparent disclosure of additional fees ensures clarity on the total cost of management services. A very low percentage like 20% usuall;y means they are lacking real full service management services leaving work for you to do, from filing Hotel/Motel occupancy taxes to scheduling cleanings to not have maintenance personnel on their staff
29. Are there fees associated with vacancies in off season or owner use?
Generally charging for cleaning to an owner is of course more than fair, but do they charge you a booking fee of $15 to $50 per owner use booking?
30. What is the typical vacancy rate by season properties under your management?
A low vacancy rate demonstrates effective marketing and repeat client attainment strategies. Please note: on a beach destination Sept 15 to Dec 15 roughly is absolute low season, with occupancies ranging from 0 to 25% FYI. Summer though should be over 88%
By asking these questions, you’ll be better equipped to evaluate and select the best South Padre vacation rental management company that aligns with your needs and expectations.
Want these questions answered completely by us? South Padre Trips is the #1 rated Property manager on google reviews with the most 5 star reviews on the Island.
Contact Chad on his cell 512 – 825 – 2157 by call or text; Our office line is 956-242-0904 or email: chad@southpadretrips.com