“In House” Services Lack Transparency For Vacation Rental Home Owners
What Are “In-House” Services in Vacation Property Management?
I’m often asked by potential clients, “What ‘in-house’ services does your company provide?” This is a great indication a sales pitch has been provided by another vacation property management company. ‘In-house’ refers to services provided by staff or employees of the vacation management company such as cleaning, HVAC repair, handyman work, and many others. It is specific work completed by the staff of the company… and billed by the company to the home owner. These services are not provided by 3rd party, independent providers like outside cleaning companies and HVAC repair companies. The services operate and originate within the management company.
How “In-House” Services Could Be Problematic
When a home owner selects a property management company, the relationship shares the same responsibilities as that of a real estate agent. Those legal responsibilities are Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable Care as written in SC Real Estate License laws. We, as licensed professionals, have a fiduciary responsibility to represent our client’s best interest first.
How can management companies represent a client’s best interest if the company decides how much a service, provided within their company, should cost for their client, the home owner? It seems like an obvious conflict of interest and a lack of transparency and the fiduciary responsibility previously mentioned.
Remember, your vacation management company should be working for you… and not vice versa. You are hiring someone to represent your best interest as the client and home owner. At dunes properties, we do not staff maintenance personnel, HVAC repairmen, or cleaners. We coordinate 3rd party providers so prices can be negotiated lower for our clients. It is the correct way to offer vacation property management and offers transparency to clients.
Unfortunately, it has become commonplace for legacy management companies to charge their clients a percentage of invoices. In my opinion, it is a terrible practice and also seems to be a conflict of interest. How can a company represent a home owner’s best interest if the company orders service and then receives a percentage of “mark up” on the work performed? It is arguably a legal kick back. Always check your management agreement for counter-intuitive inclusions like invoice mark ups.
by Wes Walker
Vice President of Vacation Rentals
Dunes Properties of Charleston
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