APRIL ON THE island means the wild dogwood trees are blooming and we are enjoying longer days of warm sunshine for beach strolls. We have just enjoyed one of our earliest Easter holidays in recent memory. As a vacation rental homeowner, it is also time for you to meet with the professionals that assist you in the business of managing your investment property.
I’m pretty confident that you have recently scheduled an appointment to meet with your CPA to discuss your projected income tax situation (and probably filing an extension, too!). Real estate investment property has its own peculiarities when it comes to the IRS and the current tax code ensuring you need extensive documentation of depreciation schedules, year over year expenses and proof of owner stays that were necessary due to periodic or scheduled maintenance. Your CPA is the only qualified professional with the expertise to counsel you at income tax time. Likewise, you have annual discussions with your insurance agent to discuss your liability and homeowner policies, flood insurance and, of course, wind and hail coverage. You may also be scheduling appointments to meet with your attorney to form an LLC for each of your investment properties or to discuss how best to set up family trusts for estate reasons. Each of these professionals has a vital role in how they assist you in managing the small business endeavor that is also your well loved beach home that you lease by the night, week or month to vacation rental guests.
Your vacation rental manager may be the most under-utilized member of your professional team. Just as you enjoy a warm, professional relationship and rapport with your CPA, attorney and insurance agent, I would like to encourage you to develop a similar strong professional relationship with your vacation rental manager (VRM).
As a professional, your VRM has many years of experience in this industry, is usually highly educated and attends yearly VRM conferences and continuing education in this extraordinarily complex sector of tourism and hospitality. A top notch VRM wants to partner with each vacation rental homeowner. As partners, they want to discuss your unique investment strategy to learn what your goals are for income, how many weeks you would like to see booked and help you see all the ways that investing in upgrades, renovations or new furnishings can truly pay for themselves in enhanced booking revenue. Share with them your appetite for engaging in rate reductions to fill vacant weeks in the most difficult time slots of early June and late August.
From their years in the industry they can help you analyze why bookings may be down and support this by recommending you become an avid follower of your vacation rental home’s online reputation through social media and open source reviews like Trip Advisor. If your VRM offers feedback from your rental guests via survey comments, read and take to heart these compliments and constructive criticism. When you receive emailed requests for action from your VRM, respond within 24 hours even if you have to say you need more time to reflect or to ask them for more information. Please do not ignore your VRM when they send you reports of decks that need repairs, broken appliances or air conditioners that need to be replaced during the hottest week of July. At the very minimum, an annual appointment scheduled with your VRM for a face to face meeting either at their office or in the living room of your beach home will truly help to foster that friendly rapport and understanding with your VRM. No VRM wants to feel they are managing an orphaned investment property with a homeowner that is absent from any necessary decisions to protect their investment.
Many of you already enjoy an excellent relationship with your VRM, with deep feelings of mutual respect and loyalty. I know because of the warm friendships I have enjoyed over the years even with homeowners that I only get to see a few times a year. Just like with family members or any friendship, these bonds that are formed during the good times help us to weather the disappointing and difficult days that may happen with severe weather, a slow market or necessary but expensive emergency repairs. Befriend your VRM and I promise you will actually look forward to attending to the business of owning vacation rental property. It’s a conversation worth having.
Julia Batten Wax, Broker/Owner
Emerald Isle Realty