Since Airbnb burst onto the scene in 2007, short-term property rentals have exploded in popularity. Whether you’re an investor, homeowner or cottage owner, the sharing economy brings an opportunity to make maximum returns. Rather than sitting on your investment, you can optimize your property to provide a secondary income.
While great for making money, managing guests, maintaining the property and attending to hospitality needs can become a full-time job. That’s where a property management company comes in. You can hand over the keys and not sweat the details—just relax and reap the rewards. Over the last few years, however, thousands of property management companies have stepped onto the scene, all presenting themselves as the right company to handle your property. So, how do you choose?
Your property is an investment; one you want to protect. And after scrolling through countless property management websites and listening to every sales pitch imaginable, they all start to blend together. That’s why you should look for a company that advocates transparency. It’s important that you fully understand a property management company’s process to see what really sets them apart from the competition. You want to find the right fit for you.
To help you identify the “must have” characteristics of a property manager, we’ve listed the most important questions to ask a prospective company and included why these questions are important. That way, you’ll be armed with the information you need to better understand if they’re the right partner to manage your property.
1. How will you promote my property?
Why it’s important: Beautiful properties attract eyes—and wallets. But even the most stunning layouts and designs need a little help. If you want to get reservations and make money, you need to market your property properly.
What to look for: Your property is stunning and you need a property manager that knows how to show it off. Don’t trust a company that takes amateur photos of your space, only to upload low-quality versions onto a listing. You need a company that takes the time to craft a listing that highlights the most impressive features of your property.
2. How do you optimize the listing?
Why it’s important: Exposure is everything in the short-term rental industry. It isn’t enough to just slap a listing onto a booking channel, you have to encourage consumers to engage with it. Sure, if you have a really nice property you might get lucky and hook a few guests, but you won’t consistently earn high rates. That’s why it’s important to boost your listing’s online visibility.
What to look for: Any operator on Airbnb can fill your property during peak season, but what you need is a property management company with the resources, network and expertise to promote your property all year round. It’s a bad sign if a property manager is only operating on one or two booking channels. Along with minimum exposure, this probably means they’re not leveraging the channel’s booking tools. You need a company that offers wide exposure on multiple platforms. A successful company understands how online travel agencies (OTA) work, specifically how to use their ranking algorithms to get your listing to the top of the search results. The company needs to put your property first, maximizing its exposure on all of the major booking channels.
Topic: Revenue Management
3. How do you guarantee revenue in a competitive market?
Why it’s important: The short-term rental market is extremely competitive with new listings popping up all the time. It’s far too easy for your property to get lost in the crowd.
What to look for: If you want your 5-star property to generate as much revenue as possible, you need a property management company that has its finger on the industry’s pulse. You want a team with tested strategies that can guarantee you’ll receive the highest returns. The company should have a revenue management team and a marketing team devoted to finding that sweet spot for pricing, while promoting your property year round.
4. How do you optimize prices?
Why it’s important: The short-term rental market fluctuates throughout the year. That’s why it’s important to keep your prices flexible in order to attract successful bookings. To get the highest average daily rates (ADRs), your prices need to reflect demand.
What to look for: To ensure your property is never undersold, you need a property management company that will get you the highest ADRs all year round. The company should have a revenue management team devoted to keeping prices competitive by comparing them to nearby vacation rentals and hotels. Your prices need to reflect demand, capitalizing on price hikes during the peak season and offering discounts during the slower months.
5. What's your strategy for the slow season?
Why it’s important: The dreary winter months are when property management companies can crumble. Bookings drop and suites are left vacant or sold at low rates, attracting troublesome guests. In order to maintain a continuous flow of revenue, your property needs to be booked at the highest occupancy year round.
What to look for: Your property management company’s marketing team should be dedicated to monitoring your listing, particularly during the slow season when it needs extra attention. To ensure your listing stays in demand, the marketing team should get an early start, preparing well before the winter months by setting aside a budget for extra marketing expenses and implementing a strategy that leverages promotions, discounts and paid ads to attract guests.
Topic: Trust & Safety
6. How do you protect the property?
Why it’s important: The last thing you want is to be sitting poolside on vacation worrying about your property. It’s a major investment, one you want to protect. But unfortunately, short-term rentals are prime targets for property damage and criminal activity. That’s why it’s important to ensure your property is protected by the latest security measures.
What to look for: A property management company’s number one priority should be protecting your property against damages and high-risk guests. As such, strict expectations for behaviour need to be outlined to the guest before they book, so they understand that they will be held accountable for their actions. Be wary of property managers that are more focused on facilitating a successful transaction than the safety and security of your property. It’s likely they don’t have your best interests at heart.
7. How do you screen guests?
Why it’s important: You might think it’s best to book as many guests as possible, but in reality, not every guest should be welcome inside your suite. Too often you hear horror stories about nightmare Airbnb guests throwing parties, damaging property or disrespecting the neighbours and building staff. To avoid dealing with those situations, you need to systematically screen your guests.
What to look for: The property management company you choose to partner with must have protocols in place to screen guests. They should not be afraid to turn down travellers who pose a risk to your property. You wouldn’t let a long-term renter move in without verifying their ID and performing a background check, so why a short-term renter? Be wary of any companies that book without verifying a guest’s ID. Otherwise, your property will face much greater risks.
8. How do you deal with inappropriate guests?
Why it’s important: It’s a sad reality, but not all guests will respect your property. Many just see it as a place to party. Bad guests put you at risk of property damage, and they can ruin your property’s reputation with the building, neighbours and future guests. To keep everyone happy, you need a system in place to deal with inappropriate guests.
What to look for: While high occupancy rates are great, you want a company that cracks down on rule breakers. The company’s guest support team should outline house rules to the guest before they confirm their reservation, encouraging compliance. That way, the guest knows exactly what’s expected—no partying, no smoking and no additional guests! Unfortunately, guests don’t always respect the rules, so your property management company needs a system in place to evict inappropriate guests.
9. How do you protect against credit card fraud and chargebacks?
Why it’s important: The whole reason you’re renting out your property is to make money. It’s an investment and you want to make sure you’re seeing the returns. But short-term rentals are prime targets for credit card fraud. If you want to get paid (and avoid chargebacks), make sure your property manager is securely processing every guest’s payment.
What to look for: To guarantee you get paid, your property management company must have a secure payment method in place. This should involve verifying the guest’s credit card to protect against fraud and chargebacks. If the company doesn’t have a payment protection plan, be wary—you might not be seeing those returns.
Topic: Property Protection
10. Do you have insurance?
Why it’s important: Insurance is tricky in short-term rentals, so it should be one of the first questions you ask. Would you trust your car with an uninsured driver? Of course not. So, why trust your property with an uninsured company?
What to look for: When it comes to insurance, the first thing you need to ask is whether or not your property is protected under the company’s insurance policy. Just because a company claims to be insured doesn’t mean your property is covered. If the company’s insurance doesn’t protect your property, you can be left vulnerable to thousands of dollars in damages. That’s why you need a management company that’s bonded with a general commercial liability policy that extends to your property’s address.
11. What does the insurance cover?
Why it’s important: A lot can happen in the short-term rental industry. With so many different guests passing through your door, accidents are bound to happen. That’s why it’s important your property is covered by an insurance policy that addresses all kinds of situations.
What to look for: You need a property management company that has its own dedicated insurance policy; one that specifically covers your property under all circumstances. Don’t rely on a third party insurance policy—it’s too risky. Take Airbnb for example. The Host Protection Insurance program only acts as the primary insurance coverage for incidents related to an Airbnb stay. Worse still, it’s completely at Airbnb’s discretion whether or not an incident is covered. You need an insurance policy that you can rely on. One where you know what the exclusions are. That way, if there’s a leak or fire, you can rest easy knowing you’re protected.
Topic: Property Maintenance
12. How do you ensure cleaning quality?
Why it’s important: The guest’s first impression of the suite can set the mood for the rest of their stay. And cleanliness plays a huge role in this. Guests don’t want to check in to a dirty suite—they want a space that feels uncluttered and fresh. That’s why it’s important to keep your property spotless for every new guest.
What to look for: When your guests are paying high nightly rates, they’re more likely to notice the difference between a quick surface clean and a thorough deep clean. That’s why you need a property management company that uses professional cleaners to scour every nook and cranny of your suite. Be wary of any property managers that do not use a professional cleaning service after each guest. Otherwise, your property will start collecting dust.
13. Are your cleaners insured?
Why it’s important: Using cleaners who are not insured or bonded can end up costing you way more than the service is worth. If someone falls, injures themself or causes significant damage to your property, you’re left paying for it.
What to look for: When you sign on with a property management company, check to make sure they use a cleaning service that is insured and bonded. Specifically one that is covered by the Workplace Safety & Insurance Board.
14. How do you handle the towels and linens?
Why it’s important: Clean towels and linens keep a suite feeling fresh and luxurious. There’s nothing quite as comforting as curling up in a soft, pillowy bed that feels brand new or drying yourself off with a fluffy, never-before-used towel. High quality products make for high-end stays.
What to look for: The difference between luxurious and bland can often hinge on the state of your suite’s linens and towels. To ensure guests are kept happy, you need a property management company that uses high quality products and replaces them often. The towels and linens should be professionally cleaned off site to guarantee the best results.
15. What happens if something breaks?
Why it’s important: Your guests shouldn’t be greeted by a leaking toilet, broken chair or burnt-out light bulb. It’s a guaranteed way to ruin the guest’s trip. When accidents happen, you need a property manager that can deal with repairs quickly and efficiently.
What to look for: It’s impossible to avoid breaks and spills in the short-term rental industry—accidents happen. You need a property manager that responds to these accidents quickly and professionally. Be wary of companies that let repairs sit for more than a day or two. This can expose you to additional risks and liabilities.
Topic: Account Management
16. How available are you?
Why it’s important: It’s important to have a property management company that’s ready and available to answer all of your questions. You don’t want to be left in the dark about your own property.
What to look for: Your account manager or representative should be available to answer all of your questions in a timely and efficient manner. The last thing you want is for your property to be tied up with a company that is unreachable when you have questions.
17. What happens if there's a problem in the suite?
Why it’s important: Unpredictable problems pop-up in the short-term rental industry all the time: toilet paper runs out, chairs break and basements flood. If these situations aren’t handled properly, they can wreck a guest’s stay and ruin your property’s reputation. To avoid this, it’s important to have a property management company that’s prepared to handle all kinds of problems.
What to look for: Some issues, like a broken bed frame, need immediate attention. It can’t wait until the next guest lays down for a night’s rest only to find the bed collapsing beneath them. To solve this, the property management company you partner with should offer 24/7 assistance. They need to be immediately responsive, staying on top of all issues within your suite. If they are truly hospitality experts, they will know how to handle any and all problems.
18. How do I get paid?
Why it’s important: When you invest in the short-term rental industry, you’re not renting your property out for free—you want to get paid! Most importantly, you want to get paid regularly and on time.
What to look for: Whether it’s weekly, monthly or yearly payouts, your chosen property management company should provide you with regular payments delivered on an agreed upon schedule. There should be no exceptions to you getting paid. Be wary of any property managers that don’t offer a consistent and transparent payment method.
19. How do I find out how my property is performing?
Why it’s important: An effective property management company shouldn’t leave you in the dark when it comes to your financial earnings. You want to make sure your property is being optimized to its full potential. To make sure this is the case, your property manager should be sending you regular updates on how your property is performing.
What to look for: The property management company you choose should have a transparent system in place that allows you to easily track your property’s performance. You want a property manager that keeps you informed, even if your property is performing poorly. Be wary of companies that withhold information about how your property is doing.
20. How does your company comply with building and municipal bylaws?
Why it’s important: The short-term rental industry is growing at an unbelievable rate, leaving politicians and building operators trying to catch up. This means that laws around short-term rentals are constantly changing. If you don’t want to be hit by a hefty fine, it’s best to make sure your rental property complies with these laws.
What to look for: Far too often guests receive messages from property managers telling them not to bother the building’s staff. This is an immediate red flag, indicating that the building forbids short-term rentals. Or worse, a building that looks the other way and disregards municipal laws. To avoid getting into trouble, you need a property management company that respects and abides by all building and municipal laws.