1.6 The Industry Professionals

One of the first things a successful vacation rental agent does is assemble the best team they can find in the industry. 

 Your credibility as the agent is directly linked to the affiliates you work with and how they service your clients.  People don’t need you to find them a house; they can do that themselves online.  What they need you for are your experience and your contacts.

 In this industry, your contacts are worth gold to your client and they’re depending on receiving nothing less than that from you.

Who You’re Going to Need On Your Team:

Aside from your regular toolbox of people that you would have in your back pocket in a regular residential sale (home inspector, lender, title company) you’re going to need a few more additions to your team to make this all come together.

 Short Term Rental Property Manager

This person is going to be one of the biggest assets to your team. Your property manager holds the power to seal the deal with every client if they’re good and they know what they’re doing. 

Because this is going to be the person that your client gets passed off to after the sale of the home, there are two important relationships that need to be in place before settlement:

Yours with your client…and  the client and property manager 

The property manager will be responsible for providing you with all the rental income estimates and expenses that your client can expect when owning the home.  They should already have homes in their rental program that are performing well and are similar to the homes you will be showing your client. Your client will need to see this documentation before buying and the property manager is responsible for providing it.  

Use Caution: There are a couple of issues you need to be aware of when selecting a property manager.

Are they also a licensed sales associate?

If yes, this presents a major conflict of interest, the reason being is that if a future sale opportunity comes up in the future with your client (such as selling their home or purchasing more) there’s a good chance that the property manager will try to get the sale.

If you have a good relationship with them and get something in writing in advance you can avoid this scenario but you may prefer to work with PMs who are not licensed sales associates. 

Are their numbers accurate?

If the rental income projections they are quoting your client look fantastic on a spreadsheet but are not actually accurate figures, your client is being set up for major disappointment after the sale.

Property Managers have been known to embellish their rental income projections to try and get the sale and it’s your job to be able to confirm the accuracy of these figures.

You will be the one your clients come back to if they have a bad experience because you were the one that recommended them.

Be very cautious who you attach your name to. 

Tax Accountant

The accountant on your team is preferably one who specializes in foreign national investments and property ownership. 

A lot of your business may come from a foreign owner, a situation that presents a completely different set of tax issues. 

Many accountants typically work with domestic property owners only, and may not be equipped with the experience and information to properly handle your client’s unique needs. This being the case, your client will not feel at ease purchasing unless they know, without any doubts, all of their tax needs will be in the right hands, and the entire scenario has been explained to them in advance. 

One of the biggest misconceptions foreign investors have is how taxes are handled here in the US.  Not being prepared to deal with this may result in you losing clients. 

 Foreign National Lender

• While 75% of vacation rental transactions are cash sales there will always be that 25% that you don’t want to miss out on that will need financing.
• A domestic investor has more financing options than a foreign national investor however; there are many loan programs out there for foreign nationals.  
• Getting aligned with a lender who has options for foreign nationals is a very smart move.  You will want to know the basic restrictions and requirements because you will get asked this question. 
• Make sure the lender understands you are selling vacation rentals and some may be furnished. Furnished homes can sometimes present an issue for financing because of appraisal issues.  Advise your client of this as well and be prepared in advance for any issues that may arise from this scenario.

Banker

Domestic investors are likely to have a local branch of their bank, but in the case of foreign nationals, in most states, they will need to have an account opened with a local bank before they can close on the property. 

This means they will need to have all of this taken care of at least a week before closing. 

Insurance Providers

This is an area investors can get into trouble if they are unaware of the necessity for specialized insurance.  They need to know that:

Traditional homeowner’s insurance is not sufficient for short-term rental activity

STR insurance providers often offer solutions that work with either a traditional policy or have all-in-one policies specific to the STR market.  Standard brokers may avoid STR however there are specialized insurers who understand the business such as Proper Insurance

Short-term rental insurance is unique as it typically includes significant third-party liability cover, business interruption, and theft/damage cover.

Most management companies require the home to have at least 2M in liability coverage 

Vacation Interiors Specialist

For those homes that are sold unfurnished, you will need someone who is experienced in outfitting vacation rentals.

Interior decorators are very different from vacation rental furnishing specialists. Vacation rentals require specific items in them in order to be the most appealing to renters and compete with the other homes on the market.

Some management companies will not accept a home into their program unless it’s specifically furnished a certain way so you need an expert in your corner that has furnished many vacation rentals and has references to prove it.

You need one who has worked with management companies as well, knows exactly what they would need in the home to make it rent, and also can work within your client’s budget. 

You may find your property manager offers this service but it’s still good to have a second person to refer people to so they have options.

Handyman

Don’t underestimate the power of a good handyman! Every Realtor needs one in their back pocket.

You will have clients that prefer not to use a property manager or may just want to renovate the home prior to putting it on the market for rentals. You will need a good handyman to refer them to for things like painting, flooring, interior and exterior repairs, landscaping, and just about anything that you can do over the weekend with a trip to Home Depot and a toolbox.

Your client will love you for referring them a good, honest handyman who can take care of these issues for them. Your clients won’t know anyone locally; they’re depending on you to send them the best contacts out there.

Assembling Your “Dream Team”

Knowing who you need on your side is half the battle; finding them is the other. 

You could do a google search for local property managers, lenders and so forth but you’ll find the best contacts are made from fully immersing yourself into the market in real life, not online.

If the best contacts were found online your client wouldn’t need you. 

Take your time to get to know your communities, visit with the staff onsite, the homeowner’s association, talk with guests, etc.

Ask for referrals to people they know.  Get in touch with them & get to know them before doing business with them. Make sure you have met every person face to face before sending them your clients; see their workmanship and/or check their references.

This may take some time but the work you do here will pay dividends in the long run.

As you work more in the market and talk to other agents and get referrals, some homes you will be showing may already have management in place and you can find people that way.

There are many other ways to source contacts but the best is often face-to-face, forming relationships via trial and error. As your network grows and you become more familiar with the people who are active in vacation rentals in your area.