|
Q: I have a condominium in Mammoth that I do not rent but I have friends
that own and do rent and they tell that things have become a little
"funny" in the rental business. I figured you might have some insight,
so tell me what you think is going on?
A: I'm not really sure what "funny" might mean but the local
reservation industry is always undergoing change and opening of the Village
and the relatively new bed base at Chair 15/Eagle Base is having their
impact. About a dozen years ago when I was just getting my new RE/MAX office
off the ground, I was also overseeing one of the sizable reservation
companies in town. What we always noted was that the business had "so many working parts.
Today it has even more working parts--maintaining owner contracts and
relations, the process of taking reservations and sending confirmations,
getting the units ready for arrival, the cleaning upon departures and
seasonally, the linens, lost keys, plugged toilets, frozen pipes, cranky
customers who are out of their element, and on and on. You also need
excellent accounting systems and an expensive interactive web site and
somebody to answer a toll-free line almost 24 hours a day.
Most companies spend a considerable amount of time and money on marketing to
stay competitive. Today, the ability to speak Spanish sure helps. All of
this in a community where good day-to-day employees are hard to find and the
ebb and flow of this particular business is insane. And then you are
accountable to the Town of Mammoth Lakes to submit timely bed tax reports
and payment. And today's clientele is more demanding than in the past.
I'm sure I have forgotten some of the nightmares and exercises the
business puts you through, and there are probably some new ones that have
come along. This all being said, things are bound to get "funny".
The use patterns of many of Mammoth's new condominum owners is another
factor. With the advent of the value pass many owners want to use their
properties more often and more impulsively. Some owners have simply taken
their units out of the rental pool. Other owners are using their own web
sites to "self book" and aren't giving their reservation company
enough open dates to make it worth their while.
But what it really all comes down to is that for those owners who want good
income out of their properties and aren't getting it, they are the ones
that are going to think there is a problem. The first place for those owners
to go is to their reservation company and have a frank discussion about
their property (and especially about it's rentability) and to get a good
working knowledge about how the company operates. All of the different
companies have different methods of prioritizing rentals and just
understanding that can be a make or break. Companies have different
management fee structures that effect income depending on usage. And it
seems as though some of these methods and policies have been changing lately.
I have recently become aware of one for instance. Hypothetically, if you are
an owner at Juniper Springs Lodge and you let your elderly parents hang out
at your condo for the month of September because it is not only beautiful
but quiet (and any rentals are unlikely), you somehow lose rental priority
and status. There have been recent cases where doing so lost some owners
valuable Holiday rentals. The front desk simple didn't book units (because
of the "system") during a period when the town is supposedly 100%
booked. It doesn't make sense to me. Any time a business entity can
produce peak revenue (and profits) for itself, their clients, and the Town
coffers as well, and they don't, is perplexing. If I was those owners I
wouldn't think it was funny because the Holiday period is the most
valuable of the year. That is why it is critical to know the rules of the system.
Other prominent reservation companies appear to be charging their owners
extra fees (beyond cleaning) if they use their own property during the
season. Wasn't that the concept of having such a condo-use it at your own
enjoyment and rent it when you aren't? But apparently there have been
enough issues that the companies feel this is warranted. Just another working part.
Ultimately, if rental income is really important to an owner, understanding
the system and putting the property in the best standing with the rental
agency is critical or accept the tradeoffs. But for many the tradeoff has
become more ski time or time enjoying the mountains. And that is why you
should own in Mammoth in the first place.
|
