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Property Management 101

Property Management 101

What Second Home Owners Need to Know

Most of the  homes in Port Aransas are second homes for vacationers. Most, but not all of those owners want to generate some rental income from their property in addition to the benefit of having a place at the beach for their family and friends to enjoy.
Unless the owner lives nearby and has the time and resources to manage the property himself, he/she needs to secure a qualified property manager. This is an important decision and comes with a fairly hefty price tag. Most of the property management companies are locally owned and operated and can attend owners, renters or properties in a timely manner.

IN-HOUSE PROPERTY MANAGEMENT
The condominiums that have a front desk that checks in guests are known around here as condo-tels.  Buyers need to realize that these mandate the use of their designated property managers—some of which are onsite. Generally this costs quite a bit more than a third-party management company: 37-50%.  Smaller family-owned management companies are often cheaper and more attentive just because of their size.  Rates are more like 18-21% vs. 20-25% for larger local companies with lots of properties in their rental pool.

Examples:     http://www.barefootrentalsporta.com/

                         http://www.visitporta.net/

Condos, townhouses and houses without a front desk usually permit the owner to choose their own management company, but that is changing. Some complexes are unifying the property management end by specifying a third-party management company, too.

WHAT’S INCLUDED?
So what does the owner get in return for this cut of their rental revenue? Mostly convenience! Some of the services they offer are:
• Secure online booking and payment
• Online guest comments
• Marketing through professional website with high quality pictures and descriptions of all properties
• Facilitate guest relations
• Professional housekeeping service –guests pay for this
• Inspection of property after each rental
• Stocking and restocking of needed supplies like soap, paper towels, trash bags, linens and toilet paper
• Professional service technicians and sub-contractors to address issues like AC, plumbing, lighting, etc.
• 24/7 access for renters and owners
• Unique access key codes for entry for heightened security and guest tracking (some but not all have this)
• Provision of a rental history to owners to determine amount of gross rental income generated
• Maintenance of burglar and smoke detectors
• Changing air filters

WHAT’S NOT INCLUDED:

• Extra linens
• Hurricane/storm refunds after the rental has commenced
• Liability for renters’ personal property

The convenience of having a second home rented and maintained frees owners to enjoy the property when they want—provided they place their intended stay dates on the calendar.

SELF-MANAGEMENT

Some people choose to manage their own properties but must be available 24/7 to attend to guests and maintenance issues. Most owners of vacation homes do not live in or near the area and find this to be an impractical solution. Some companies like VRBO and Home Away offer online booking and management services for a fee and are considered middle-men. Most local management companies in Port Aransas pay these companies a fee to help them find vacation renters. It is usually cheaper to book directly with the management company instead of going through these vendors, and the customer has more control/recourse–much like finding a cheap air fare on Expedia, etc., then booking directly through the airline.

PROPERTY MANAGERS WITH REALTOR AFFILIATION:

There are several excellent property management companies here in Port Aransas, many that work in conjunction with a Real Estate brokerage so that when an owner wants to sell their vacation home or buy one they’ve stayed in, they can contact the realtor through the management company. Most notably:

• Port A Escapes:  http://www.portaescapes.com/site/Home/31837/default.aspxColdwell Banker
• Port A Beach House:   http://www.visitporta.net/ Keller Williams
• Silver Sands Rentals:   https://www.silversandsvacationrentals.com/ Silver Sands Realty
• Starkey Management:   http://www.starkeyproperties.com/Starkey Properties

The link to their real estate side is on their websites.

OTHER GREAT LOCAL COMPANIES ARE:

Barefoot Property Rentals:  http://www.barefootrentalsporta.com/

TurnKey  https://turnkeyvr.com/port-aransas-texas

Life in Paradise    http://www.lifeinparadise.net/

LONG TERM OR ESTATE PROPERTY MANAGEMENT

Another option to consider if the property is not used as a short-term rental, is a long-term rental or estate property management. This is a specialty concierge service for luxury homeowners who do not live here full time, but do rent their property for two weeks or more.

Contact my friend Christian Taylor at http://islandtimepropertymanagement.com/

Her website gives a thorough description of the many service options available.

 

DO YOUR HOMEWORK FIRST
As when choosing any product or service, the buyer should do the necessary due diligence—check online reviews, get a personal recommendation and/or interview the property managers on the phone or in person. This is a highly competitive business and a huge expense to the home owner. The consumer has lots of choices and should do their part by being informed. Bigger isn’t always better. Management companies that are small and/or family owned sometimes provide a higher level of personal service because they have fewer properties to oversee. And when you or your guests call/text, it’s often the owner of the business whom you’ll speak to.

Port A Property: What Matters Besides Location?

When considering buying a vacation home in Port Aransas, whether for family use and/or vacation rental, there are many factors to consider. Other than the first three rules of real estate: Location, location, location…. what’s number 4 and 5?

PRICE:
Topping that list, of course, is price. Talk to your lender to see what you can qualify for. Better yet, check your cash reserves and see what you could purchase outright. As Dave Ramsey says, “Cash is king!” You can usually drive a better bargain with cash; the closing costs are much lower and the time to close is much quicker.
If buying a property for rental income, get your hands on a rental history.

Keep in mind that you’ll only see the “Gross Rental Income.” Your smile may fade somewhat when you start deducting fixed costs such as management fees, property taxes, interest paid on mortgage, opportunity cost, HOA fees, insurance and maintenance. (More on that in my next blog.) If the property is zoned for short-term or nightly rentals (R-2) but has not been in the rental pool, try to obtain a rental projection. You can usually get one for free or a nominal cost from a local rental management company. Ask your agent for help on this.

AGE OF THE PROPERTY:

Materials:
Once that’s decided, consider the age of the property because newer properties have less wear and tear from other renters/owners. Modern construction methods and materials are better. Salt is a killer corrosive and takes a heavy toll on any metal surfaces outside, including screws and bolts, door hardware and garage doors. Exterior surfaces covered in Hardy Plank® siding or stucco stand up better in the briny air than wood. While brick is a good option, it often doesn’t convey a “beachy” feel to your coastal home.

When it comes to roofing, choose galvanized steel, aluminum or tile. It’s more expensive than composite shingles but lasts longer and stands up to the punishing ocean winds. The AC unit takes a beating in salt air, so newer properties’ AC will be in better shape.

Instead of pressure-treated wood trim, decking and railings, newer properties use vinyl railings and Trex® decking. Both look great and last longer because of sun and wind resistance and don’t attract termites and other wood-destroying insects.

Properties built before 1978 have the possibility of the use of lead-based paint and the seller must verify that either it’s been repainted since then (!) or that they have no knowledge of the use of such paint. Contemporary homes and condos use impact-resistant windows that can withstand high velocity winds and flying debris. They are usually vinyl or vinyl-clad and are more energy efficient.

Design:
Besides the practical matter of better technology and building materials, newer homes look….well…New! They use pastels or intense cheerful colors that fit the tropical theme and architecture, especially here in Port A which is distinctively coastal–as opposed to colonial, modern or traditional. Port A’s style isn’t trendy, though. It’s been around for the past 10-20 years because of its timeless good looks. And if the current building boom is an indicator, it’s a style that will persist.

Newer properties usually have more modern interior features such as open floor plans, low-entry tile showers, granite tops and stainless steel appliances, glass tile backsplashes and nickel or bronze finish plumbing fixtures. They employ other up-to-date design features like wood-look ceramic or vinyl flooring. Many are finished out with shiplap siding on the interior walls and/or ceiling. This not only looks great, but can stand up to the heavy wear and tear by renters much better than sheetrock.

Although carpet is warm, cozy and quiet, it’s not a great choice at the beach. You just can’t keep the sand out! So most newer homes use little or no carpet, instead opting for hardier flooring such as ceramic, laminate, or vinyl strips.

Trends: 
Another trend is emerging in Port A, especially in the luxury market: living areas on upper floors. Since the price of lots is expensive, larger homes go vertical which best optimizes your slice of the ocean or marsh view. The kitchen, dining, and living areas are typically on the second floor, and if there’s a third floor, that’s where you’ll find the master suite. Guest rooms and storage are on the ground floor. If the home is really high-end, you can access those upper stories via your own personal elevator!

Because of the threat of flooding, many newer homes are built on stilts. They may or may not have garages or storage rooms on the ground floor. Otherwise, there’s a parking area under the home which also serves as outdoor living area that’s shaded. If the ground floor wasn’t originally finished out for living space and you enclose it later, it (and its contents) may not be covered on your insurance policy.

Assessments:
Older properties are more expensive to maintain in the short run and in the long run. If you buy a condo, house or townhome with a Home Owner’s Association (HOA), you might find higher dues to keep the property in good shape, especially those older properties nearer the water’s edge. Also, thumb through the “sticky pages” of the deeds and covenants package and ask your real estate agent to find out if there’s an “assessment” planned. To cover major renovations like new roofs, exterior painting, pool updates or parking resurfacing, HOAs bill the owners. Depending on how old the property is and how long they’ve deferred these maintenance issues, this assessment could climb to $5000-$10,000 or more per owner. Usually but not always, when a property is sold, the seller pays for some or all of this cost. Bottom line—-consider the age of the property! …..It’s a thing.

For more buyer tips:      http://myfavoritebeachproperty.com/index.php/buyers/

To read my Zillow reviews:    https://www.zillow.com/profile/lisahood25/#reviews

Why choose Keller Williams?    http://www.kw.com/kw/mvvbp.html