We acquired several clients recently that own more than one holiday rental they let out. When we asked, they were universal on the reason. This boiled down to investing in property being a superb medium to long-term investment, plus the added advantage of obtaining steady income.
Only one of these clients had all their properties in their hometown, in this instance three in a row in a condo-style resort. The other two had bungalows on beaches several hours’ drive away from each other. This adds an additional layer to the management task, and poses the question how to hire a holiday rental manager.
Defining the Management Task in Holiday Rentals
Before attempting a one-size-fits-all answer, we should define the management tasks in question first. We can borrow ideas from corporate thinking, although our world of business is just a tiny microcosm. At the base of the hierarchy, we have people involved in routine administrative tasks like housekeeping, pool and garden maintenance, and so on.
At the midpoint, we need people to execute our operational plans to maintain the fabric of the building according to a program – and troubleshoot problems when bad weather strikes, systems fail, or clients accidentally cause damage.
As holiday rental owners are at the apex of the pyramid, where we control and oversee marketing and money management matters. We are the captains of our ships. We have to be. Only we have our best interests at heart, although there may be exceptions.
The tasks ‘above deck’ we need done are two-fold. The first, lesser one is supervisory and should involve little more than spot-checking quality assuming we chose our housekeeping, pool maintenance, and garden service providers wisely. Choosing the ‘crew’ and listing their duties is the job of the ‘captain of the ship’. We should never delegate selection of the people who serve us. The same applies when we hire a holiday rental manager.
The second task is more complex, and involves making sure the fabric of the building inside and out maintains the standard we want. The quickest way to get to a list is to think of the improvements to the land. So moving from the perimeter inwards we have fences and gates, anything in the garden with a foundation, and the building – roof, ceiling, windows, doors, walls inside and out, floors, patios and verandas included – plus anything attached permanently to them.
We draw the line just this side of appliances connected to building systems, be these electrical, water or drainage. In our model, housekeeping keeps an eye on these and reports concerns to us so we can call in a service provider. This is not to say they do not liaise with our local manager. It is more a financial matter, something we may not have budgeted for. Let’s get down to the nuts and bolts of the matter.
The Likely Cost to Hire a Holiday Rental Manager
Clearly, this is not going to be a full-time job, although we do need to agree a retainer as ‘the labourer is worthy of their reward’. The money is the right place to start. One possibility is to base it on the average Australian wage. This is not something in stone, we just need to agree a basis. Here is one way to go about it.
- The average Australian wage for full-time workers is $80,000 a week
- The maximum ordinary working hours are 38 a week according to the Fair Work Ombudsman
Simplistically this suggests an average hourly rate of $40.50. We can debate this, but at least it is something credible based on verifiable facts. Armed with this and imagination we derive a costing table based on the following assumptions:
- The manager will inspect the property four times a month
- They will liaise twice a month with regular / call-out contractors
- There will be two occasions a month when they will do emergency shopping
- For the rest, the ‘people below deck’ will keep our holiday rental ticking over
This gives us a plausible estimate (with assumptions) of how much it might cost to hire a part-time holiday rental manager. But, is the risk worth the cost? According to Stayz, the reward is equivalent to three nights for four people in a decent Sydney holiday apartment. If the person is able to reduce our downtime to a minimum, the investment will be worth it.
But, Is This the Best Way Hire a Holiday Rental Manager?
Before going ahead with advertising, and selecting and appointing the best person, it is worth considering appointing a professional real estate / property management firm. Our research suggests most would prefer the whole deal and not just the ‘nuisance part’ of it like managing defects. Their base charge can be as high as 18% to 20% of rental revenue, PLUS charges for call-outs and other property management tasks. This runs counter to our desire to own and benefit from our own holiday rental, and we can discard it.
The Holiday Rental Academy Advice
Find a local resident through word of mouth based on personal recommendation. The ideal person may be semi-retired, with spare time on their hands and a gift of making friends with strangers readily. Do not let your guard slip even if you know them. Check their bank and credit references and validate their CV.
If they touch all the bases, you can appoint them confidently. You can delegate some of your worries to them. You can never abandon your responsibility to monitor, and to manage after you appoint a holiday rental manager.