Full transparency is our ethos at Navarre Beach Properties. We always go the extra mile to be open and honest about everything we do — and that includes being extremely clear when it comes to our service fees.
Unfortunately, this isn't always the norm among property management companies. We often hear stories of homeowners paying more than they should to managers. For instance, in one incident, an owner was paying a 'booking fee' that amounted to an extra 14% of their total bookings, plus taxes, to their property manager — and that excluded the commission fee!
We also frequently encounter homeowners who claim that other property management companies in Navarre Beach charge lower commission rates than ours.
We're always very suspicious when we hear that. We suggest that they investigate further and make sure these companies are not charging hidden fees. We've seen it happen too many times.
In our market, it's always wise to triple-check the terms and conditions before signing a contract with a property manager. Certain firms, without naming names, have developed ways to increase their profits without their clients being fully aware.
But, as we've emphasized, we value transparency. So, in this blog, we'll teach you how to identify hidden fees before you sign with a Navarre Beach property management company.
Let's get into it!
Vacation property managers in Navarre Beach, FL are a great help in boosting revenues for your condo or rental home, but it's important to make sure they are transparent with their practices.
What is rent-seeking, anyway?
"Rent-seeking" is a practice in rental property management and other industries that aims to boost management profits without the need to provide any extra value to owners. "Hidden fees" is another way to think of it.
As we've covered, some managers will try to claim a larger portion of your profit (more than what they actually deserve) by hiding fees from you when you sign a contract or charging fees that are just unfair according to our market practices.
Before going through some of these fees, here's a quick reminder: In general, Navarre Beach rental property managers can significantly contribute to the growth of your business. We don't want to give the wrong impression here. Despite the fees, we couldn't continue this blog without highlighting the advantages of having a property manager on your side.
You might know very well how complex managing a short-term rental can be. Professional property managers can lift a lot of the weight from your shoulders; they deal with a large part of the workload involved in running a business and making it thrive.
Property managers have you covered in handling urgent and unexpected situations that may come up, as well as keeping your rental in good shape through regular inspections. Not to mention, they will also work hard to get more bookings at the best rates possible for you.
All that is extremely helpful in driving your vacation rental business to success. You just need to find someone you can trust and share that ownership feeling with you.
The main hidden fees property managers charge owners
Considering local managers in Navarre Beach, you can expect to pay 30-40% of your total revenue for full services. With bigger, national managers, for example, you can expect to pay a little less.
This blog will focus on these bigger companies, which generally offer better services. However, keep in mind that the rules we'll present also apply to local companies.
Below are some estimates of the rates charged by some major players in the market:
Vacasa: 15-25%; full management.
Turnkey: 15-25%; full management.
Evolve: 10%; partial management.
You can consider these fees as standard for the industry.
But we are here to talk about hidden fees — those unclear fees you should not be paying. Here are some of these "sneaky" fees you may come across sooner or later:
Booking fees: these are fees to cover the cost of facilitating and managing bookings. At Navarre Beach Properties, though, we don't charge this fee. Other companies do; Evolve, for instance, asks for 3% over bookings, while Vacasa asks for 12-14% on direct bookings on top of a commission fee of about 20%.
Maintenance fees: some property managers may include a markup on maintenance and repair services. This could mean that you end up paying more for repairs than the actual cost. Moreover, even if there's no service performed, some property managers charge monthly fees regarding maintenance.
Insurance fees: this is a fee many owners are unable to identify. They relate to an insurance or "guest insurance" fee. These can begin at eight dollars a day, coming out of the owner's income. So that amount would be deducted from your nightly rate, and you still also have to subtract their commission fee.
You also might come across business tax fees, credit card fees, bill processing fees, and even vacancy fees — yes, you heard that right! These unexpected costs can accumulate rapidly, constituting a significant 10-15% of your earnings, which is less than ideal.
Avoiding hidden fees
Now that you know how rent-seeking works, let's cover how to avoid these sneaky fees.
The best way to go is simply by carefully being aware of all terms and conditions and paying special attention to any vague language you may encounter. Whenever something is not clear, ask specific questions before hiring their services.
Pen and paper in hand, here are some important questions you can ask:
What services are included in your management fee?
Are there management fees applicable to vacant rental properties as well?
Could you please explain the full criteria that influence the calculation of your nightly rates?
Are there additional charges beyond the management fee that I should be aware of?
Note that the last question is very straightforward. It would be challenging for property managers to refrain from talking about extra fees if you are directly asking about them.
Still, some managers will not tell you everything you need to know about all the fees you'll be paying upfront. That's why it's very important to find a reliable company that will be transparent about fees from the beginning.
Other Navarre Beach property managers may hide fees to boost their profits, so try having a one-on-one discussion and asking the right questions before signing a contract.
FINDING A TRUSTWORTHY NAVARRE BEACH PROPERTY MANAGER.
Once more, there are good folks out there who will make sure to be open with you and will not compromise transparency in order to boost their profits.
Property managers work hard and they deserve the fees they charge; it's just a matter of finding the right one and always looking out for those hidden fees.
Want more valuable insider's tips? Head to our blog where we talk about the many facets of our business. You'll find tips on décor, revenue management, and how to make your beach rental stand out from the fierce competition out there, among other topics.
