If you recently bought a vacation home in the Panama City Beach area, I don’t need to tell you that you’ve made a smart decision -- you already know it. Panama City Beach and the surrounding communities are some of Florida’s most sought-after destinations among vacationers who are in search of some fun in the sun. In addition to the incredible beaches, many shops and spas, and the vibrant dining and nightlife scene, this region of the Florida panhandle is home to many points of interest.
Because of this, the Panama City Beach area is considered a prime location for beach homes and condominiums, with single family properties and condos accounting for a majority of vacation rentals in this region. In fact, our Rented.com 2016 Short-Term Rental Income Report rates Panama City Beach as the most profitable place in America to buy a vacation rental property, with an estimated rental income of $28,800.
Managing a beachfront property on Panama City Beach comes with unique challenges that local property managers are experts in handling. Image: Pixabay user paulbr75
Every day at Rented.com, we work with vacation homeowners grappling with how to manage their vacation rental property (and maintain their sanity) while maximizing those rental profits and their return on investment. The instinct for many first-time vacation homeowners is to not give up any of that rental income paying property management fees. But the reality is, managing a rental home yourself, especially in a popular, in-demand vacation destination like Panama City Beach, can be overwhelming and beyond time-consuming. Working with the right property management company can actually increase your profits, lower your risk, maximize your ROI, and help you enjoy your rental property, rather than stress about it.
So where do you begin? How do you find the perfect property manager for your Panama City Beach rental property? In this guide, find everything you need to know and consider when choosing a rental property management company for your Panama City Beach vacation home.
What Services Do I Need from my Property Manager for my Panama City Beach Rental?
First, let’s talk more about why you need a property manager for your Panama City Beach vacation home and the services one can provide. If you've never bought a vacation rental in the area (or any vacation home, for that matter), it may not be immediately apparent why you might need a property manager. After all, how much management could a second home need, right?
The reality is, a vacation rental is very different from a rental holding that serves as a full-time residence. With a full-time residence, the maintenance is typically limited to the outdoors, along with some occasional repairs. You also have a minimal amount of marketing and tenant screening for a full-time rental, since many tenants will remain in the property for multiple months or even years.
In the case of a vacation rental, you must continually market and promote the property, plus there's a significant amount of guest screening and vetting (if you opt to go this route.) You'll also need to arrange to have the property cleaned, maintained, and any issues repaired. To complicate matters, it's not uncommon for guests to take items, particularly linens, kitchenwares, and tchotchkes. So you'll need to inspect the property in between guests to look for any essentials that may have been taken so they can be replaced before the next guests arrive.
On top of this, if you’re trying to manage your property yourself, you’re likely doing it from a distance, which can be a challenge. Being at a distance, you're at a distinct disadvantage because it becomes nearly impossible to effectively monitor and care for the property, while also ensuring the home is looking its best for your guests.
A vacation property management company can provide many of these services for you. In most cases, it’s up to you, the property owner, to decide which services you would like your property manager to handle and which ones you want to handle yourself. When it comes to choosing a property manager in Panama City Beach, consider these additional services you might ask your property management company to provide:
Storm and Flood Preparation
Panama City Beach and the surrounding region is prone to tropical weather systems, which can potentially result in property damage. This is particularly a risk for beachfront properties or properties that are situated quite close to the shore, since there's the added risk of flooding. In fact, if you look at floodplain maps, the entire area of Panama City and Panama City Beach are in a 100-year floodplain, which means that there is a 1% chance annually of a flood that is at or above the base elevation. To put this into perspective, properties in a 100-year floodplain have a 26% chance of seeing significant flooding over the course of a 30-year mortgage.
Panama City Beach’s Gulf Coast shoreline and the shorelines on St. Andrews Bay (particularly Upper and Lower Grand Lagoon) are in a 100-year floodplain with wave action, while the areas not actually on the water are considered a 100-year floodplain with ponding in many regions. The shorelines facing West Bay and Grand Lagoon are also in a 100-year floodplain, though not with wave action.
Often, there's not a whole lot of lead time to prepare for the tropical weather systems that most often bring major flooding. This makes it challenging and impractical from a cost perspective for you to drive or fly down to seal up the home with sandbags and storm shutters. It’s helpful to have “boots on the ground,” so to speak in the form of your local property management company, who can get to your property in a timely manner to prepare for a storm or flood.
Guest Vetting and Booking
As one of the nation’s most popular destinations among college students on Spring Break, Panama City Beach is a hotspot for 20-somethings who often lack respect for your property. This type of guest can be very destructive because many arrive with one goal in mind: to party! And that can include bringing new acquaintances into your vacation home or even continuing the festivities with an after-party on your property. Even if your guests are respectful of your home, there’s no guarantee their new friends will be, especially when you add alcohol and other substances to the equation.
For this reason, it’s important to carefully screen and vet your guests by checking references and even performing criminal records checks. Some management companies even have the technology to scan the internet for your guests’ mentions of parties and your home on social media!
Some Panama City Beach property owners may decide against renting to college students, particularly during Spring Break. If your property management firm is also handling your bookings, that decision is something the manager can accommodate.
Checking In on Guests and Building Rapport
A property manager can serve as a liaison of sorts, greeting new guests and checking in to ensure they have a pleasant stay in the Panama City Beach area. Things as simple as greeting the guests, offering local dining tips, and directing visitors to the nearest beach can enhance your guests’ stay.
The property manager can also share expert tips on the best local attractions, like St. Andrews State Park, the ZooWorld Zoological Conservatory, and Camp Helen State Park for nature lovers, or Shipwreck Island Water Park, Miracle Strip Vintage Amusement Park, and the Coconut Creek Family Fun Park for adventure seekers. This rapport-building will effectively maximize your chances of seeing repeat bookings since your guests will be more likely to have an enjoyable stay.
Regular Monitoring to Limit Property Damages
Your property manager can help you limit any damage that may arise. For example, wind gusts during a strong afternoon thunderstorm could lift a few shingles, resulting in the potential for a roof leak, which could, in turn, result in water damage and mold. In Florida, mold can spread at an alarming rate, as can water damage, particularly during the rainy summer months.
Guests may not notice this sort of damage. (Nor should your guests be burdened with being on the lookout for items in need of repair; they should be focusing on their vacation!) If you go for a long period of time without visiting your Panama City Beach vacation home, you could return to discover tens of thousands of dollars in damage -- damage which easily could have been avoided if you had a property manager to monitor the home.
What Questions Should I Ask When Hiring a Panama City Beach Property Manager?
When hiring a property management firm for your Panama City Beach vacation rental, ask these questions to find the right property manager to meet your unique needs and requirements:
What are the property management fees?
Typically, full-service property management fees for a beach rental will run you about 25-30% of the rental fee. In the Panama City Beach area, the typical fee can range from 25-45%. The figure for vacation rentals tends to be a bit higher than what you might expect to pay with a full-time residence due to factors such as the number of guests (versus a single tenant who may remain for months or years) and the higher frequency of site visits.
Full-service means your property manager handles everything, including booking, answering guest questions, cleaning, and maintenance. If you prefer to mainly manage your home yourself, but decide to hire a property manager to handle bookings and marketing only, those fees will run you about 10-15%.
Compared to some other areas of the nation, such as New England or Southern California, prices for real estate, utilities, and everyday goods and services tend to be a bit lower in Panama City Beach and in the South as a whole. So property management fees may be a bit lower in Florida versus what you may encounter in another area of the nation. But price can be majorly impacted by the precise service package offering that you’re receiving. For this reason, it’s wise to get a written price quote from prospective service providers.
In some cases, homeowners can also choose between a guaranteed income model or the traditional commission arrangement in which you receive the actual rental fees from the bookings, minus the property manager's commissions and expenses.
Here at Rented.com, we help homeowners find and compare local managers, and many of the Panama City Beach management companies we work with offer a guaranteed income model so that real estate investors and Panama City Beach area homeowners can rest assured knowing that they'll receive a specific dollar amount each and every month, regardless of actual occupancy. This model offers the security of a long-term rental with the financial benefits of a short-term one, and it can be a great option for those who require a specific sum each month to cover mortgage payments, for instance.
To get an idea of the income guarantees a Panama City Beach rental property can generate, here’s a look at a few recent Rented.com property management offers on Panama City Beach properties. Keep in mind that all of the managers bidding in these offers included the same baseline services (things like light maintenance or full-service management), but factors like homeowner usage, home amenities, and location affect the offers listed. Most of these offers are for a year-long contract.
Property management fees can also be used as a tax write-off, providing you with an opportunity to maximize the profits from your second home. This is another factor that can make hiring a property manager even more appealing for your vacation home.
Are there any property management services offered by my the condominium complex?
Condominiums and single-family homes account for a very large portion of the vacation rentals in Panama City Beach, but the property management needs for these two types of homes could differ significantly. The property manager for a detached single family home would be tasked with tending to the home’s exterior and grounds in addition to addressing the interior and all rental-related matters.
In the case of condos, it’s fairly typical for the complex to have a property manager to oversee the grounds and building exterior. Generally, anything inside of your actual condo unit is your responsibility in terms of property management. So the scope of duties for the property manager you hire for your condo may very well be far narrower than if you own a standalone, single-family home. For this reason, it’s wise to determine precisely what tasks the condominium complex oversees, so you’ll know exactly what services you require from your new property manager.
Does the property management firm require a contract?
It's not uncommon for your Panama City Beach vacation home property manager to require a service contract. Most contracts are a year long, with the opportunity to renew after the first year. In some instances, you may get a better rate if you sign a contract for a longer timeframe, and generally, the longer the timeframe, the more manager demand there is.
When deciding the length of the contract, consider how certain you are that you’d like to have a working relationship with the property manager you’ve chosen. If you’ve never worked with a property manager before, then it may be best to opt for a one-year contract to start. If you’ve worked with this particular property manager and have lots of confidence that you’ll be happy with a more long-term working relationship, a longer contract could be advisable.
Does the vacation rental property management firm handle marketing and bookings?
Marketing the property to travelers and vetting guests can be quite time-consuming. You need to know what marketing methods to use to connect with your target audience, when to market the property most aggressively, and which areas of the country are more likely to be vacationing in Panama City Beach.
For a Panama City Beach vacation home, you’ll want to target people who live in colder locations beginning around November and continuing into the spring. You’ll also want to market to potential guests in cities with a large college student population because Panama City Beach is renowned as being a wonderful spot for Spring Break.
While virtually all firms do handle marketing and guest vetting, it's not necessarily the case. And some vacation rental owners prefer to personally oversee the process of marketing and booking their second home, so you'll want to consider what tasks you'd like to handle personally. Be clear on what services the property manager will provide.
Can the property management company accommodate special requests?
Vacation home owners can be quite particular about their properties. Some are committed to going above and beyond to ensure that guests have an incredible experience by delivering gift baskets during their stay or by offering access to a boat or other vehicle.
Or perhaps you'd like to see to it that only certain guests rent your vacation home. For example, some do not rent to college students (significant in Panama City Beach, where college students account for a large portion of the tourists), while others do not welcome pets. Whatever the case, it's important to ensure that your rental firm can accommodate your unique needs.
Have you spoken with references?
Don't take the property manager's word for it that they bring great results. Take the time to consult with a few references before penning a deal with a property management company. This will help you ensure that you're picking the right person or company to suit your unique needs and meet your expectations.
If you own a condo in Panama City Beach, your needs for property management services and your fees will differ from those who own a single-family home. Image: Pixabay user Unsplash
How Do I Find a Local Property Manager for my Panama City Beach Vacation Rental?
If you're ready to connect with a property manager in Panama City Beach or in one of the surrounding communities, get started by creating a free private profile on Rented.com. Once you do that, you’ll receive offers from some of the most successful property managers in the region, and you can choose the management firm that best fits your needs.
Be sure to also check out our rental grader, which helps you estimate the short-term rental income you could earn from your home based on nearby homes, and our income calculator allows you to determine the total cost and earnings from your vacation rental property or Airbnb. These resources can help you ensure you’re making the most of your vacation home with high rental profits and maximum ROI.
Lead image: Flickr CC user Kristin Nador