Gulf Shores and Orange Beach Management Commissions
Unfortunately, it has become popular for some Gulf Shores and Orange Beach property management companies to employ a low commission scheme that actually costs the homeowner money.
The industry average in Gulf Shores and Orange Beach is around 20-25% percent, and these companies are offering commissions as low as 10% in some cases.
We couldn't understand how they were doing this as we know the built-in costs of managing a property exceeds 10%. No one wants to work for free, right? After looking more closely, we uncovered their scheme.
When someone books a property, they get a breakdown that includes Rent, Taxes, and Fees. The homeowner gets paid the Rent minus the Commission. Thus, the owner does not see the Fees or Taxes on their monthly owner statement.
Here is an example of two identical properties, one is managed by our company and one is managed by a competitor's company.
3 bedroom at Phoenix West II (Prickett Properties Website) :
| Arrival Date: | 04/10/2021 | ||
| Departure Date: | 04/17/2021 | ||
| Vacation Rental: | Phoenix West II 1808 | ||
| Rate: | 2100 /wk | ||
| Total Rent: | 2100.00 | ||
| Fees: | 259.00 | ||
| Taxes: | 306.67 | ||
| Sub Total: | 2665.67 | ||
Total: |
|
3 bedroom at Phoenix West II (Competitors Website) :
APRIL 10 -17 2021
Rent (7 Nights)$1,800.00
Fees $513.92
Taxes $300.81
TOTAL
$2,614.73
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The total price is comparable to one another but look at the fees and rent. The competitor has charged significantly more in Fees AND and lowered the Rent.
What will the homeowner get paid under Prickett Properties commission vs the Competitors?
Prickett Properties :
Rent 2100 - Commission (20% or $420) = HOMEOWNER PAY $1680
Competitor :
Rent 1800 - Commission (15% or $270) = HOMEOWNER PAY $1530
It is unfortunate that these companies feel the need to trick people into joining their property management program. We could employ the same scheme to even out the playing field, but that just seems wrong.
Therefore, we are taking the approach of educating property owners instead of tricking them.