The Real Cost of Delivering First Class Results
When you think about the future of your business over the next decade, do you feel confident, secure, and 100% on top of things?
If that’s a hard question to answer, you’re not alone. Lots of short-term and vacation rental Property Managers admit to feeling overwhelmed, burnt out, and anxious about the future. They struggle to adapt to the rapid evolution of the industry and deliver what today’s homeowners and guests demand.
In this article, we’re taking a close look at what it really takes (and what it really costs) to make it as a Property Manager in 2020. As your margins are getting slimmer, does it make sense to outsource part of your work?
The Modern Short-Term and Vacation Rental Landscape
The short-term and vacation rental landscape has changed drastically over the last 5 years. First, there’s the technology: new, complex, and rapidly changing. And then there’s the homeowner and guest expectations, which have grown exponentially.
It’s no longer enough to have a beautiful website, list your properties, and wait for the calls and messages to start coming in.
Owners expect more. When they turn their home over to a Property Manager, they’re expecting perfection. They’re counting on you to do significantly better than they imagine they could do themselves!
Your margins get compressed as costs for tech, marketing, and salaries rise. And that’s not all…as more Property Managers enter the market and compete for inventory, homeowners have plenty of options. That creates intense pressure on you to do more, for less.
The True Costs of Running a Property Management Business in 2020
So what do you need to provide to your owners in this “new” market, and what are the costs—financial and otherwise—involved?
A professional listing
$300 - $1000 per listing
What owners want: Drool-worthy photos, listing text that makes their property irresistible, and to get their property to the top results.
Costs, if done right: Fixed setup costs, like professional photos and listing editing. Typically, this will cost around $300 to $500 per listing.
Costs, if done wrong: A listing that’s buried on page 27 of the results and that almost no one sees, or a drab listing that doesn’t get booked.
What Angel Host includes: A professional listing with a strategic new description, stunning photos, and photo captions. Ongoing listing updates to make sure the ranking algorithms favour your listing.
1% to 3% of rental revenue
What owners want: To outperform competing properties and secure higher revenues. To get the most bookings, for the highest rates possible.
Costs, if done right: Ongoing percentage-based dynamic pricing system costs, which average 1% to 3% of rental revenue.
Costs, if done wrong: Property Managers often struggle with poor performance and under-optimized bookings and revenues caused by basing the pricing on last year’s data or market intuition, or on choosing a “set it and forget it” tool.
What Angel Host includes: Powerful dynamic pricing based on data analysis and hundreds of metrics. Our revenue managers use advanced algorithms and years of experience to create custom long-term and short-term revenue strategies for each property. They perform frequent manual adjustments, ensuring optimal bookings and revenues.
PMS, Multi-Channel Distribution & Optimization
3% to 5% of rental revenue
What owners want: Their listing, on every platform, perfectly synchronized.
Costs, if done right: Initial channel distribution setup & optimization, which can cost thousands, plus ongoing Property Management System (PMS) and channel management software costs – budget 3% to 5% of rental revenues. You’ll also need to invest hundreds of hours to learn how to properly configure and use the tools.
Costs, if done wrong: Relying on older software to keep bookings synchronized can lead to lots of headaches and embarrassing double bookings. Keeping up with all the changes and current “best practices” for optimizing your listings across all the OTAs is very time consuming.
What Angel Host includes: Seamless instant synchronization across all platforms. No more PMS hiccups, and everything is always up to date, from check in instructions to automated review requests.
3% to 10% of rental revenue
What owners want: For their Property Manager to respond to all guest messages immediately, guaranteeing more bookings and better guest satisfaction.
Costs, if done right: Salary costs for dedicated team member(s) to check inboxes and respond to guest inquiries and booking requests 24/7, ideally in multiple languages. Depending on your overall revenues, this can cost anywhere from 3% to 10% of rental revenues.
Costs, if done wrong: If potential guests don’t get a rapid response, they’re likely to move on to another property. If you try to handle all the inquiries yourself or with team members who have other responsibilities, things often fall through the cracks.
What Angel Host includes: A friendly, multi-lingual team to correspond 24/7 with your potential guests from every channel and turn them into confirmed bookings.
Depending on your local market conditions, property portfolio, and other variables, the costs for providing truly professional Property Management to your owners tends to range between 15% to 25%+ of each property’s annual revenue.
If you're ready to grow, it's time to...
Focus on What You Do Best, Outsource the Rest
What could the future of your company look like with Angel Host?
Angel Host provides technology and services that support you, local Property Manager. We take care of the tasks that are tedious and time-consuming, but still critical for success.
This gives you the freedom to do more of what you’re best at.
You’re the on-the-ground experts. Angel Host helps you streamline operations and amplifies your ability to:
- Deliver outstanding service to homeowners and guests
- Partner with local providers
- Upsell additional services
- Sign new owners and properties
- Pursue additional revenue streams
The Verdict: Is Angel Host's 10% Fee Worth it?
To compete in the modern market, you have to go beyond simply managing properties…your role is to shape the guest experience and provide more personalized service to your owners. And these are things you’re uniquely equipped to do!
Angel Host takes care of the most tedious, repetitive, time-consuming parts of your business, and provides you with first-class service for less than what it would cost you to do it yourself.
Turning these tasks over to Angel Host saves your team time, allowing them to focus on other important aspects of your business…so you can grow and thrive in this new decade.