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This was a small mom & pop operation. Our property manager, Jim, agreed not to charge us for bookings that we secured. That sounded good to us. We were rookies at this and had no idea whether we'd ever secure any bookings on our own. We felt we needed the security of professional assistance. We arranged for our guests to pick up the key from Jim's office when they arrived in town and Jim would coordinate the cleanings for us. When Jim booked the condo, he would get 25% of the rental income. (Of course, management companies are in business to make a profit and commonly contract out their cleaning services to low wage earners at $8 - $10/hour and charge owners anywhere from $50 to $70 for a one-bedroom condo that takes 2 to 3 hours to clean.)

We had heard of vacation rental websites by owner and had quickly listed our property on a few sites. To our delight, within a week or so, we actually secured a couple of bookings! Soon, our calendar started to fill up. We realized we had a decent arrangement in place. We'd get our own bookings and Jim was there to hand out the keys and be available should a problem arise.

Well, not long after buying our condo, a problem did arise. Our renter called about a problem with the toilet. I called Jim. He brushed it off as a problem with the local water company. He never went by to reassure the guests. I ended up calling the water company myself and then called my guests to tell them that everything had been taken care of. I suppose I shouldn't complain, after all, in my property manager's defense, he wasn't making any money off of me by operating solely as a key service.

After the first 6 months of owning our condo, we'd managed to maintain 90% occupancy and secured all of our own bookings. We never received any bookings from our property management company! Fortunately, this did not hurt us. However, had we not been proactive and listed our property on "by owner" websites, this vacation property ownership would have turned sour fast.

Several months after buying our condo, a well-known national real estate company purchased our little mom and pop management company. It took about 3 months for the new property managers to realize they were operating solely as a key service for us. They called and wanted to sit down and "discuss our options" but I knew we were still under contract according to the terms agreed upon with the original property owner. [In buying the small company, the national company assumed all contracts in place.] There was nothing the big management company could do. Actually, it was kind of fun, telling the big national real estate company, who was whining about making no income on our property, to "book our condo and [you'll] make money!"

I was glad when the new property manager took me up on my offer that we end the current contract and part ways. At this point, I had already discovered two of the property management firm's worst nightmares:

1. disgruntled cleaning people who have worked for these management companies relish the opportunity of working directly with property owners and
2. the dreaded lock box!

Having said all of this about management companies and self-management of vacation rental property, I realize that some owners do not want the hassle of getting their own bookings, finding a cleaning person, or coordinating maintenance activities, especially when the property is hundreds of miles away. Some owners want the peace of mind that comes with the added expense of a property management company. That's completely understandable. However, for the "average Joe" who wants to build wealth, self-management is the only way to go.