Are all management agency T&C's like this?

Agencies and other headaches, keys and cleaners, running costs and contracts...in short, all the things we spend so much of our time doing behind the scenes.<br>
Kilm
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Are all management agency T&C's like this?

Post by Kilm »

So we're trying to figure out if we should go down a management company for everything for our holiday home, or if we should take to do with most of it ourselves.

Having looked at one agency in the area, it all sounded very good until I read the small print, and I was very surprised at how stringent it is.

Here are they key points I've flagged up for further discussion with them at a meeting next week, but keen to see if this is the standard across the industry:

1. They dictate the rental price of the property, not us. This includes the standard rate and any special deals, etc, they decide to run

2. They stipulate a minimum of three nights. The company we're buying the house from gave us their books and they made a few thousand out of one and two day stays. They're not willing to entertain the idea however, which I feel makes us lose a potential market?

2. If we want to use the home ourselves, which we will do, a fair bit, we pay them an admin fee of £25 plus standard changeover costs. I'm taking it that the admin fee is basically the cost for them to mark it unavailable on booking.com and other sites.

2a. Even if there are no bookings for the date we want to use it, they can tell us 'No, you can't stay'?

3. Any commission paid to referrers which they organise, they add on to to the top of the standard charges so they don't lose out. I.e, that 10% commission comes out my pocket, not theirs

4. 12 month contract with a £495 cancellation fee

5. A £65 per hour charge if the customer contacts them outwith working hours, even though this is their top tier package which says they greet / deal with during stay / bid farewell to the customer

6. My details available to the customer? Not sure if this is legislatively required? I ideally don't want to be ever contacted by the customer at the home if I'm paying for a top tier management package. Although at a potential £65ph they can phone me all they like!

7. An admin charge if they are required to get the handyman involved, which also charges £35 plus any cost of work.

There's more, but that's a starter for ten.

So we're kinda wondering if we should just arrange booking windows in such a way that I can drive three hours there, three hours back, and do the changeover / laundry myself (£30 fuel in total), or organise just the laundry / changeover companies ourselves. This mob are using external firms anyway, so we may very well be able to organise those companies ourselves.

All basic costs included, a three night stay of £360 will see me walk out with £170 from that booking. Is that average? Normal? Or are we being saddled up like a Blackpool donkey about to be taken for a ride?

Thanks again for your time and input!
Hells Bells
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Post by Hells Bells »

One and two night stays are not profitable, even if they do bring in income, it will all disappear in changeover costs.
zebedee
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Post by zebedee »

I would find another agent. There are plenty of them, although not all as good as each other

I think your problem may be that you want an agent to obtain your bookings, which is one thing, but also to provide a full managing service, which is a separate function and therefore comes with its own costs. You may be able to manage both more cost effectively. However, it can take time to source good local contractors and it is difficult when you start in an area unknown to you (ie unfamiliar with regards to builders and other contacts).

I don't like the aspect of the contract regarding your own bookings though. It is your property after all. I would go with someone else.

I don't know which area you are in but there is a reputable owner of a small agency who posts on this forum or you could disclose your location and ask members for recommendations or suggestions
Good luck
sparkJS
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Post by sparkJS »

My deal is relatively similar except commission to refers and giving info to guests (is that an insurance thing?) However I have no time to deal with it myself. If you have time, I would do a lot of the work myself even if it is coordinating contractors.
MG
rosebud
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Post by rosebud »

I also live a 3 hour journey from my property...

It took me a long time to find a really good excellent housekeeper .. but now I have one. I also employ a gardener.. (At the moment I am without a handyman..)

I found a local agency to do the marketing for the first 2 years. They had none of those restrictive / expensive clauses. (I did have to send my standard letter to guests before they arrived but the agency dealt with any issues / complaints)

I decided against going with one national agency because of their restrictions on my use of the property etc.
Pirou
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Re: Are all management agency T&C's like this?

Post by Pirou »

Kilm wrote:So we're kinda wondering if we should just arrange booking windows in such a way that I can drive three hours there, three hours back, and do the changeover / laundry myself (£30 fuel in total), or organise just the laundry / changeover companies ourselves.
Cripes!! What if you have a car breakdown, fall ill on a changeover day or find a 6-7 hours in a car plus stripping/cleaning/re-making the house too exhausting for a days work? We live about 3 hours (3 hr 10 mins to be accurate! but maybe a bit more if trafficky) from the house and it didn't even cross my mind to do the changeovers myself. I have a local caretaker/manager couple who do meets/greets and gardening/maintenance but do all the booking and advertising admin myself. It can take a long time to manage one booking so I wouldnt knock management fees

I'd look for other management companies though. The restrictions seem very strict and I would object to any company being able to veto when I wanted to stay in my own property (providing there were no bookings of course). And what if you have a nightmare guest who keeps picking fault at £65 per out of hours contact call? And how do they prove that they've had these calls if you can't verify this direct with the guest?
newtimber
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Post by newtimber »

Have you tried negotiating the terms? If they are a small business they might be prepared to remove terms which are a deal breaker for you.
JP
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Post by JP »

I don't think these terms are unusual or that unreasonable if you are basically wanting to say "here is my house please rent it out and pay me each month" and you have no further involvement in the process, they are not going to do it for nothing.
If you want 100% of the income then you are going to have to do a lot of work and despite what people think its not easy money.
Are you sure you wouldn't be better with a long term rental fixed income each month and no one taking a big cut?
Kilm
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Post by Kilm »

Hells Bells wrote:One and two night stays are not profitable, even if they do bring in income, it will all disappear in changeover costs.
We're going to follow the same pattern as the previous company - for a one night stay, it costs the same as a two night stay, and a two night stay costs the same as a three night stay.

Looking at the books for the last year, they had quite a few one and two day bookings. A one night stay basically cost the same as a two night stay, two nights cost the same as three nights. Cost deduction wise, it would appear to work out alright in that respect.
zebedee wrote:I would find another agent. There are plenty of them, although not all as good as each other

I think your problem may be that you want an agent to obtain your bookings, which is one thing, but also to provide a full managing service, which is a separate function and therefore comes with its own costs. You may be able to manage both more cost effectively. However, it can take time to source good local contractors and it is difficult when you start in an area unknown to you (ie unfamiliar with regards to builders and other contacts).

I don't like the aspect of the contract regarding your own bookings though. It is your property after all. I would go with someone else.

I don't know which area you are in but there is a reputable owner of a small agency who posts on this forum or you could disclose your location and ask members for recommendations or suggestions
Good luck
Yes, I suspect we may be able to, and thankfully we're in a very small area, so it's not hard to identify who they're using. In fact, they told me who they use, and I've got a visit lined up with those third parties on Monday to talk shop.

Good to know it's not just me thinking it's a bit of an odd one for them to hold final say over when we can, and can't, use our holiday home. We want to generate some income from it to cover the cost of the house, but really, it's more a long term investment for us in terms of a potential retirement location / daughter to inherit / cheapo holidays once the pound crashes through the floor come Brexit!
sparkJS wrote:My deal is relatively similar except commission to refers and giving info to guests (is that an insurance thing?) However I have no time to deal with it myself. If you have time, I would do a lot of the work myself even if it is coordinating contractors.
I'm really stumped on the 'giving out my info' bit. That to me defeats the entire purpose of paying them their top tier to look after the place. I'll be querying that and will let you know what their rationale is behind it. I mean, in my own humble opinion, I should only be getting a phonecall from the agency if something has happened that's going to incur immediate cost / house has exploded / people dead, etc. Not because the handyman didn't know when phoned, how to set the telly to record a show, so they've phoned me at 2200hrs on a Saturday to ask.
rosebud wrote:I also live a 3 hour journey from my property...

I found a local agency to do the marketing for the first 2 years. They had none of those restrictive / expensive clauses. (I did have to send my standard letter to guests before they arrived but the agency dealt with any issues / complaints)
Rosebud, you don't happen to have a copy of the T&C's do you so I could compare and see what else is out there?
Pirou wrote: Cripes!! What if you have a car breakdown, fall ill on a changeover day or find a 6-7 hours in a car plus stripping/cleaning/re-making the house too exhausting for a days work? We live about 3 hours (3 hr 10 mins to be accurate! but maybe a bit more if trafficky) from the house and it didn't even cross my mind to do the changeovers myself. I have a local caretaker/manager couple who do meets/greets and gardening/maintenance but do all the booking and advertising admin myself. It can take a long time to manage one booking so I wouldnt knock management fees

I'd look for other management companies though. The restrictions seem very strict and I would object to any company being able to veto when I wanted to stay in my own property (providing there were no bookings of course). And what if you have a nightmare guest who keeps picking fault at £65 per out of hours contact call? And how do they prove that they've had these calls if you can't verify this direct with the guest?
Yes, it does sound crazy, but our plan if we went that route, would be to structure the booking availability to suit our changeover requirements, i.e. out on a Sunday late morning, and I'm up there to changeover for a Tuesday window onwards. All very rough and sketchy ideas, but I like to have every option laid out.
newtimber wrote:Have you tried negotiating the terms? If they are a small business they might be prepared to remove terms which are a deal breaker for you.
Monday. We shall see how flexible they are. They manage far bigger properties than mine and so may well just tell me to take it or leave it, which to be honest, isn't the kind of company I'd want to work with anyway. Companies should recognise the small and independent nature of these sort of things and make allowances for that.
JP wrote:I don't think these terms are unusual or that unreasonable if you are basically wanting to say "here is my house please rent it out and pay me each month" and you have no further involvement in the process, they are not going to do it for nothing.
If you want 100% of the income then you are going to have to do a lot of work and despite what people think its not easy money.
Are you sure you wouldn't be better with a long term rental fixed income each month and no one taking a big cut?
I clearly don't expect the work done for nothing, and the basic rates seem to be fairly in line, it's more the clauses that have flung me. It's my home at the end of the day and if I want to use it, I certainly shouldn't have an agency telling me, "No.". As for an LTR, no, because we plan to use it once a month ourselves, so that wouldn't be feasible.

It would be a lot of work to do it ourselves, we don't deny that for a second.

There are a few other agencies I've lined up on Monday and some cleaners / handymen, etc. We've just got the last of the paperwork through and it turns out they're leaving everything for us, right down to forks and spoons, toilet paper stocks, etc, so we're laughing in that regard and could realistically start renting it out immediately if the demand is there, which it is looking at the current area.

Lot of work still to be done, some very helpful feedback there, so I shall let you know how it goes in regard to discussions with the various agencies, etc.

Thanks everyone!
JP
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Post by JP »

If it's one of the agencies like Sykes they will keep your property full but only because they cut the price to bargain basement levels but you end up with bargain basement clientele who are very tough on the property, loads of wear and tear.
Mike&Chrissy
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Sykes

Post by Mike&Chrissy »

I support what JP said about Sykes. We've been running a year on the south coast with them and have had a demoralising amount of damage. Sykes' lack of a security deposit makes it worse as we have to claim in retrospect. They don't acknowledge emails, so you have to phone to see if they've received them and are becoming quite autocratic over pricing. The final straw for us was when we were told that their photo team knew everything there was to know about displaying cottages and did not want or need owner involvement.
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Cymraes
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Re: Sykes

Post by Cymraes »

Mike&Chrissy wrote:I support what JP said about Sykes. We've been running a year on the south coast with them and have had a demoralising amount of damage. Sykes' lack of a security deposit makes it worse as we have to claim in retrospect. They don't acknowledge emails, so you have to phone to see if they've received them and are becoming quite autocratic over pricing. The final straw for us was when we were told that their photo team knew everything there was to know about displaying cottages and did not want or need owner involvement.
I had the same problem - loads of damage. Sykes WILL let you impose a damage deposit (we had £125) but you may have to be forceful.
Kilm
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Post by Kilm »

Thanks folks.

I've gone with one of the local companies who keep everything in-house; no booking.com or anything like that. They have a subscriber list of 11,000 and manage lodges that sleep up to 21 people, down to small cottages that sleep four, and having looked at their stats and spoken to some of their owners, they're bringing in a good 80%+ occupancy across the board pretty much, with a handful of properties on 100%.

Their T&C's are much better as well, plus they allow you to defer start-up costs until a future date once the property has started bringing bookings in. They take £300 breakage bond, plus another £35 per animal per stay and work hand in hand with a local changeover firm who are superb.

Very happy with this lot, they're just a small, local firm, though they've got 58 properties on their books, but it's a good sign when you see the MD in at 6pm on a Friday, telling his team of two to hurry up so they can go to the pub!
Mike&Chrissy
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Post by Mike&Chrissy »

Thanks Cymraes, it helps to know we're not the only ones who've had the damage problem. As with Kilm, we're moving to a local agency.
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