I work with a lot of people buying second homes or vacation homes in Mammoth Lakes. The question I get most often is “how do I find a good property management company?”
Whether you’re looking for someone to keep an eye on your home when you’re away or planning to rent your property to vacationers, finding a trustworthy and reputable property manager is a must. I always recommend setting up a meeting with potential property managers and asking these questions.
1. What percentage do you take for the management fee and what does it include?
Figuring out which property management company is “worth it” is a complicated process since they all do things a bit differently. Some will advertise a low fee but may “nickel and dime you” as things come up, so it can add up and be more expensive than a company with a higher fee up front. A company with a higher fee may include marketing, maintenance work, cleaning, and more. Be sure to ask what other charges you’ll face as an owner. Most property management companies will have pricing documentation you can read through to learn more.
2. How long is the contract term?
Your situation might change over time, so it’s good to know how long you’re locked in for. You might decide you want to manage the property yourself if you live in Mammoth Lakes, or you might want to move to a different company. Most property management companies work on annual contracts but include 30-day cancellation clauses. Be sure to ask about their cancellation policy if you need to leave the company before your contract is up.
3. How do I book my own stays?
Many property management companies in Mammoth Lakes will have some sort of online portal you can log into to book your own stay. This keeps everything orderly for you and the property manager. Since it’s your property, you can visit whenever you want, but it can be tricky if it’s already booked when you decide you want to come to Mammoth Lakes — especially during busy holiday times.
If the property management company will be handling all of the cleaning, figure out what the owner cleaning fee will be when you stay there. To make sure they maintain a specific cleaning standard, companies won’t usually allow you to clean the property on your own after using it.
4. What are your minimum requirements for stocking my property?
All property management companies have some requirements about what you have to have in your rental property. Visitors to Mammoth Lakes might book a condo or a home instead of a hotel room because of the kitchen and common area spaces, so having everything guests need is key. Your property management company will likely require a fully-stocked kitchen, but they may also require you have things like a hairdryer, an iron and ironing board, a flashlight and trash bags. Request a list from the companies you talk to.
5. What kind of liability insurance do I need?
If you plan to rent your home to vacationers, you’ll need liability insurance. Your property management company will likely require proof of this as well, but it’s a good idea to ask them for their specific requirements. While you may have homeowners insurance already, this usually leaves coverage gaps when the property is used by vacationers. I recommend Mammoth Insurance to help you navigate your insurance needs for your vacation rental property.
6. What’s your maintenance policy?
Property management companies all vary in what they consider “normal wear and tear.” If you’re not careful, excessive maintenance expenses can fall to you. Ask the property management company up front what their maintenance policy is. Some will have policies that if it’s less than a certain amount, the company can repair it without seeking your permission. The goal in hiring a property management company is to reduce your stress and worry about the property, so the maintenance policy is important.
7. How do you capture the VRBO and Airbnb market?
Especially in the Mammoth Lakes vacation rental market, VRBO and Airbnb are huge traffic drivers. Many vacationers prefer to search these sites than those of local companies. Most property management companies in Mammoth Lakes have strategies to capture this market — they might even list their properties on these forums. Be sure to ask how they’re addressing this.
8. Are you local, regional, or national?
There are pros and cons to the size of the property management company you choose. National and regional companies likely have larger mailing lists and more robust marketing programs. Local companies may give you easier access to the owner or manager of the company if issues arise. As long as the company has multiple other properties in Mammoth Lakes, they should know the local area and have the tools to deal with whatever comes up. Whether they’re local or national, make sure they have a local contact for you and for guests.
9. What are your other properties like?
While Airbnb and VRBO capture a lot of the market, some vacationers are looking for a certain style of vacation rental. Some property management companies focus on luxury rentals, while others don’t have many requirements and offer all ranges of rental quality. Always ask what other properties the company manages. You can usually learn a lot about their other properties by searching their online listings.
10. Are you available 24/7?
Hiring a property management company should give you peace of mind. If you’re still on the hook to deal with emergencies, you might feel like you’re wasting your money. If you want to be fully hands-off with your vacation rental property, ask the company if they handle everything 24/7.
If you want to learn more about buying a vacation rental property in Mammoth Lakes, download my Ultimate Home Buyer’s Guide or contact me.
If you liked this post, you might also like:
- Buying a Vacation Rental Property in Mammoth Lakes: What You Need to Know
- How to Get Ready to Buy a Home in Mammoth Lakes
- 4 Steps to Take Before Buying a Mammoth Lakes Vacation Home
Buying a vacation rental property in Mammoth Lakes can be a great investment. With recent boosts to the market — the sale of Mammoth Mountain to Alterra Mountain Company, thriving year-round tourist visitation, and ever-increasing public interest in mountain vacations — it’s a great time to consider buying a vacation rental property.
Before you dive in, here’s what you need to think about:
Consider Your Ideal Location & Budget
Photo by Josh Wray for Visit Mammoth
Properties that are closer to Mammoth Mountain access points (lodges and lifts) usually have higher asking prices. That said, you can also charge more for a vacation rental if you can boast that it’s a ski-in, ski-out property or if it has direct access to the gondola or chairlifts. Access to the local bus system can also be a selling point when renting to vacationers.
Determine Your Priorities & Bang for Your Buck
Interestingly, in the last few years smaller properties have reflected a higher return on investment. For example, a one-bedroom condo at The Village at Mammoth costs roughly $125,000 less than a two-bedroom condo, but the one-bedroom grosses nearly the same amount of rental revenue. If you are flexible on size, smaller is better. Of course this all depends on if rental income is your priority.
Check the Zoning Regulations in Neighborhoods You’re Considering
While Mammoth Lakes is a resort community, some areas in town don’t allow transient rentals (rentals for less than 30 days at a time). The majority of condos allow nightly rentals, while the majority of single family homes do not. Your real estate agent will be able to help you make sense of zoning regulations, but if you want to take a look for yourself, see the Town Zoning Map and Zoning Compliance Guide. When buying a vacation rental property, it’s essential that you understand where transient occupancy is allowed.
Do Market Research
If rental income is important to you, search vacation rentals in Mammoth Lakes to get an idea of what owners are charging for vacation rentals. If you have a type of investment property in mind, look for rates for a similar property. Look at rates in winter holiday periods (the most expensive) as well as in winter and summer in general. Check out the lower end of rates too — spring, fall and midweek stays. If you’re considering a long-term rental, ask your real estate agent for monthly rental rates for various property types.
Have a Calculator Handy to Factor in Hidden Costs
Managing a vacation rental isn’t as simple as the sale price and what you plan to charge per night. You’ll need to consider other hidden costs too: annual property tax, your monthly HOA fee, property insurance, costs of repairs and upgrades, utilities, a cleaning service between stays, snow removal and landscaping, etc.
Decide If You’ll Hire a Property Management Company or Do It Yourself
If the list of hidden costs leaves your head spinning or you’re short on time, I strongly suggest hiring a property management company to do the heavy lifting. Whether you live in Mammoth Lakes or are managing the property from afar, getting a call to fix a toilet in the middle of the night probably isn’t your idea of fun. There are several quality property management companies in Mammoth Lakes. Depending on where you buy and the level of service you need, your real estate agent should be able to provide a list for you to contact and a few questions to consider when talking with each company.
Make a Plan for Marketing
Unfortunately your vacation rental isn’t going to rent itself. If you have a property management company, they may handle the marketing for you. If not, come up with a plan before you jump into buying. Look into Airbnb, HomeAway and VRBO in addition to rental companies in town, each of which will offer different levels of service from online booking only to online advertising, cleaning and maintenance assistance. If you have other properties or a marketing background, you might decide to handle marketing on your own.
Get Familiar with Transient Occupancy Tax (TOT)
TOT is standard in resort destinations across the country. In Mammoth Lakes, this tax is 13% and is required to be paid by the guest to the owner when the stay is paid for. It’s then the owner’s responsibility to remit the TOT collected to the Town of Mammoth Lakes. A transient stay is any stay of less than 31 days. You’ll add the 13% tax on to the entire cost of each guest’s stay. If you hire a property management company, they’ll handle this for you. Learn more about TOT.
If You Plan to Use It, Make Sure You’re Excited About It
If the property will also be your vacation home, it’s more than just a monetary decision. You need to want to stay there yourself. And chances are, your renters will appreciate thing that you appreciate too. Things that make your life in Mammoth Lakes easier — underground parking, comfortable beds, a well-outfitted kitchen, access to public transportation — will make their vacations easier too.
Read more of our tips on buying and operating vacation rental properties. If you’re ready to buy, check out my Ultimate Home Buyer’s Guide. Give me a call if you’d like to talk: (760) 914-4664.