In-House Rental Departments VS. Do-It-Yourself Rentals
By Janet Fetterman, Broker Associate, CAM
Often times, people purchase a second or third home for personal use and then decide to rent it out for part of the year. They do this to use the rental income to defray part, or in some cases all, of the unit’s annual expenses. This allows the property owner to fund their fun using OPM- Other People’s Money. This is a great strategy and it just makes fiscal sense.
Over the past 2 decades of selling real estate and seeing this strategy employed, I have been asked by Buyers whether they should use the “in-house rental department” or do it themselves. My answer has always been the same, even when it comes to listing your home with the on-site sales center or going outside to another agency… but that is an article for another day.
Not all Agencies are Created Equal, so having that disclaimer spelled out up front, keep in mind there will always be the exceptions. For the purpose of this article though, by and large, I always suggest listing your rental with the in-house agency.
- No one knows the property like the in-house agency. They know the good, the bad and the ugly about the community. Over time they have also dealt with issues from maintenance through disasters and damage control.
- They are positioned physically on site and a significant number of people rent or buy because of a visit to the property. There is a lot to be said for convenience of having your questions answered accurately and on the spot. In these days of “Insta-Everything” it satisfies the consumer and maximizes their time which, for most everyone, is very valuable and in short supply.
- The in-house agency has an already established renter (buyer) pool of clients. The agency knows where to advertise, when to advertise, what to advertise and how to get the most bang for their advertising dollar. Henry Ford Sr. is quoted as saying he was sure at least half of his advertising dollars spent are wasted, he just never figured out which half. You benefit from the agency spending their dollars to learn what works and doesn’t work.
- On-site means they are most likely prepared for emergencies with either staff or trusted contractors who most likely honor the account with reasonable fees.
- The on-site staff is dedicated to the job of increasing occupancy and establishing repeat customers. With this as their main focus and attention, improvement and doing better in the future is a built-in element of their business model.
- Since the goal of the on-site agency is increasing occupancy rates of their owner/clients, they are going to book and reserve those rooms first and foremost. You are kidding yourself if you think an agency will “remember your empty unit” if you are not their customer. They are in business to perform a job and to be compensated for it. This is done by written contract with terms, condition and compensation spelled out in advance.
Here at Golden Ocala, our sister company Royal Shell Vacations handles all on-site rentals, not only for us but for over 2,000 properties. Their expertise and success is predicated on their experience, their contacts and their successful business model. If you are considering purchasing a unit for full time or part time rental, they are available to discuss your rental goals and objectives. Just give them a call at: 800-656-9111.
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