With the holiday home scene in Dubai picking up on activity again, here are a few do's and don'ts that landlords must keep in mind before and during the lease of their properties.
• Research the property management company you are giving the asset to manage. Check the type of properties they currently manage and that your property fits into with that portfolio.
• Ask to meet the team who is in charge of housekeeping and maintenance of the property. Short-term rentals need a lot of maintenance. Only work with companies who have their own team and do not rely on a third-party to do the cleaning - that will be pure a cost-cutting measure. Housekeeping is a core part of the business and is not only about cleaning, but also about stock taking, maintenance and general care of your property.
• Who in the management company manages the guests who check in and check out? Do they have some sort of a screening process? Its simple for companies to say they maintain social distancing and allow self-check in.
Think about it this way - do you want a stranger entering your place and leaving without anyone meeting them? Forget all the security issues - what kind of guests is the company attracting? You can still maintain all COVID-19 protocols and still check in and check out the guests.
This is critical as it not only allows the company to build a relation with the guest for future business, but also inspect the place to ensure nothing has been damaged before returning the deposit.
• Do they have hospitality experience? Too many companies just get set up because they have friends who own a property portfolio, or they own a real estate company and want to offer their investors an alternative income solution. But do they really understand the hospitality business? If it were that easy, then every developer would be a hotelier managing their own buildings.
• Do they have a revenue strategy with dynamic pricing? The best yields are earned from constantly changing prices. Think about it - have you ever paid the same price for a flight to the same destination?
• Do meet the founders and management of the business and see that you are aligned with them. You need to feel you can trust the people you are giving your assets worth millions.
Do not do the following when deciding to work with a management company
• Do not work with the cheapest management company unless you are giving them the cheapest assets on the market. Management fee should not be the deciding factor on which company you want to work with. Look at what they are projecting you will earn rather than what they are earning.
• Do not compromise on the interiors of your property. It is worth spending that little bit extra so that the photos come out looking great. Best performing properties have used a designer to do up.
• Do not go in with a short-term view. It takes two- to three months to be up and running, and you can only really judge the performance in the second year where you start to see repeat guests. This makes you earn more as you are not paying commissions to agents any more. Choose a company and have patience with them.
• Do not get involved in the day to day to know what is happening, let the professionals do their job and do once a month review meeting with them instead. Set your expectations and see how they meet them.
• Do not get fooled by high occupancy; a place 100 per cent occupied is actually not doing that well. Again go back to do they have a revenue strategy in place.