Ensuring Success for Your Short-Term Rental Property: How to Conduct Due Diligence on a Property Manager

Choosing the right property manager is crucial when you’re a short-term rental property owner. They are responsible for the day-to-day operations of your property, including listing the property on various platforms, managing reservations, and handling guest interactions. But how do you know if a property manager is a good fit for your property?

Conducting due diligence is an important step in choosing a property manager. It’s important to research and look beyond the interview questions. In this post, we’ll take a look at some key areas to focus on during the due diligence process for short-term rental property managers. Keep in mind that this research should be used in conjunction with a personal interview of the property manager by the short-term rental investor.

First and foremost, reviewing the property manager’s existing portfolio listings on platforms such as Airbnb and other OTAs you anticipate listing on is important. This will give you a sense of how they handle the listing process, including the quality of the photos and the listing copy. It’s also important to pay attention to the occupancy rate and daily rate (ADR) of the properties they manage. High occupancy during the off-season and high ADR are both good indicators of a successful property manager.

Another important aspect is the forward occupancy for the next 30 and 60 days. This will give you an idea of how well the property manager is able to book reservations in advance. Additionally, it’s important to check if the pricing is dynamic. Dynamic pricing means that the rates will change nightly based on demand. This is a great way to optimize revenue, so it’s a good sign if you see a property manager doing this.

It’s also important to evaluate the quality of the photos and the order they were selected. Good-quality photos that are well-lit and professionally taken can make all the difference in getting guests to book your property. The order in which the photos are selected is also important, as it should showcase the property in the best possible way.

In addition to the photos, take a look at the listing copy. A well-written listing with accurate and detailed information about the property is a good indication that the property manager takes their job seriously. Also, take a look at the policies and procedures noted in the listing. This can give you an idea of how the property manager handles things like cancellations, refunds, and security deposits.

Another important aspect to consider is whether the property manager allows pets. This can be a make-or-break factor for some guests, so it’s important to know if the property manager is open to allowing them.

Finally, it’s important to read all the reviews from guests. This will give you a sense of how well the property manager handles things like cleanliness, communication, responsiveness, and support. Pay attention to what guests say about these areas and compare them to other properties. Also, take a look at the cleaning fee and compare it to other comparable listings.

When it comes to short-term rental properties, choosing the right property manager is crucial for the success of your investment. Conducting due diligence is an important step in the process, as it allows you to evaluate key factors such as occupancy rates, daily rates, forward occupancy, dynamic pricing, quality of photos, listing copy, policies and procedures, pet-friendly policies, and guest reviews. By doing your research, you can better understand whether a property manager is a good fit for your property. Keep in mind that this research should be used in conjunction with a personal interview of the property manager by the short-term rental investor. Remember, choosing the right property manager can make all the difference in the success of your short-term rental property.