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How Do You Guarantee Your Rental Income
 
 
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Moscow_Wolf
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PostPosted: Wed Nov 04, 2015 9:32 am 
Post subject: How Do You Guarantee Your Rental Income
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This is a question I might well have asked before here or, on another forum, but if you're the owner of an Apartment within a managed apartment hotel then, how do you know or guarantee that they're telling you and paying you when/if they let your apartment for a night, week or month?

I usually turn up at these places on speck and ask if they have any rooms available and out of season they nearly always do and I end up in a one bedroom apartment and wonder, how does the owner of this apartment know that I am here, perhaps the Facilities Management Company just pocket the fee. Question

Does anyone know how it actually works?

I had an English friend in Moscow some years ago who had a studio apartment in Sunny Beach and he had installed an alarm system with a COT on the door so that nobody, not even the cleaners could get in without him knowing. I don't know why that was, but there had to be a reason.
  
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Nightowl
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PostPosted: Wed Nov 04, 2015 10:34 am 
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Moscow Wolf wrote

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how do you know or guarantee that they're telling you and paying you when/if they let your apartment for a night, week or month


You don't. Check the electric meter to find out if it's been used but apart from that there's not much you can do. I have an apartment on the coast (don't rent) and when I returned last year the bed had an been slept in and the dishes had not been washed. The caretaker (only person with spare key) had been replaced so I was left to pay the electric etc for my winter 'guest'.
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Seedy
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PostPosted: Wed Nov 04, 2015 10:35 am 
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It's not unheard of for management companies to either let out apartments on the QT and pocket the rent or open them up to their relations/mates for nothing.

We even had one supposedly-empty apartment in our complex which was let out to a couple of "ladies of easy virtue" - funnily enough, they were probably the quietest tenants in the block but the owner was both astonished and highly displeased when the Committee asked him to remove them.... Cool

The best approach is either to use a very reliable (=usually expensive) management agent or to manage it yourself. You can easily check water and power bills on the net, so you'll know if there is any unexplained consumption pretty quickly.
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Moscow_Wolf
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PostPosted: Wed Nov 04, 2015 10:49 am 
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Seedy wrote:
It's not unheard of for management companies to either let out apartments on the QT and pocket the rent or open them up to their relations/mates for nothing.

We even had one supposedly-empty apartment in our complex which was let out to a couple of "ladies of easy virtue" - funnily enough, they were probably the quietest tenants in the block but the owner was both astonished and highly displeased when the Committee asked him to remove them.... Cool

The best approach is either to use a very reliable (=usually expensive) management agent or to manage it yourself. You can easily check water and power bills on the net, so you'll know if there is any unexplained consumption pretty quickly.


Interesting as I had (wrongly it seems,) assumed that water and electricity bills would be communal and come out of the annual maintenance fee. I see in the photographs of the apartment that I am enquiring about that it has its own water heater and in the reviews on booking.com a lot of out of summer season guests were complaining that the rooms were cold and that they had to request portable heaters. As this is both a winter and summer holiday resort then, one's leccy bills could be as much as the rent received (if one receives it on an honest John basis).

I'd have to find some sneaky way to get the apartment door monitored or some counter system. Difficult to manage a property such as this when it is a few hours drive away or the owner lives overseas and how do you know that your management agent is trustworthy too. Confused
  
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tonytg806
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PostPosted: Wed Nov 04, 2015 10:57 am 
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I think that pretty much explains why I won't be investing in a holiday let. Season too short and virtually always untrustworthy management. Been there, done that elsewhere, no thanks.  
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Moscow_Wolf
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PostPosted: Wed Nov 04, 2015 12:09 pm 
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Interesting information received from the Management Company. You have to pay a one off fee to join the rental pool (as they term it,) but you don't have to join it if you don't wish to do so and you could therefore as I read it, manage your own property yourself however, more importantly to answer my opening question about how you get your rental money if you join the renting pool is contained in the following extract:-

Quote:
All owners receive detailed reports on an annual basis showing the overall performance of the hotel, profit & loss sheet, breakdown of expenses, etc.All Rental Pool participants receive income based on the performance of the whole Rental Pool and not on the performance of their individual unit.
  
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Rockmusician
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PostPosted: Wed Nov 04, 2015 12:47 pm 
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Moscow_Wolf wrote:
Interesting information received from the Management Company. You have to pay a one off fee to join the rental pool (as they term it,) but you don't have to join it if you don't wish to do so and you could therefore as I read it, manage your own property yourself however, more importantly to answer my opening question about how you get your rental money if you join the renting pool is contained in the following extract:-

Quote:
All owners receive detailed reports on an annual basis showing the overall performance of the hotel, profit & loss sheet, breakdown of expenses, etc.All Rental Pool participants receive income based on the performance of the whole Rental Pool and not on the performance of their individual unit.


You can bet your life that the profit will be massaged downwards and cash disappears into the management's pockets.
I wouldn't go near a deal like that.
Safer and more profitable to let it out yourself, but only if it doesn't cost much to get there and back from where you live.
  
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Moscow_Wolf
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PostPosted: Wed Nov 04, 2015 1:20 pm 
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Rockmusician wrote:
Moscow_Wolf wrote:
Interesting information received from the Management Company. You have to pay a one off fee to join the rental pool (as they term it,) but you don't have to join it if you don't wish to do so and you could therefore as I read it, manage your own property yourself however, more importantly to answer my opening question about how you get your rental money if you join the renting pool is contained in the following extract:-

Quote:
All owners receive detailed reports on an annual basis showing the overall performance of the hotel, profit & loss sheet, breakdown of expenses, etc.All Rental Pool participants receive income based on the performance of the whole Rental Pool and not on the performance of their individual unit.


You can bet your life that the profit will be massaged downwards and cash disappears into the management's pockets.
I wouldn't go near a deal like that.
Safer and more profitable to let it out yourself, but only if it doesn't cost much to get there and back from where you live.


As Seedy suggested, you could use an outside Management Company and not give the Hotel management a key, but then, you'd have to arrange for cleaning, linen exchange etc. The Hotel itself will charge you (the owner) Euro 10 (I assume per day) to do that job.

As it is, for your annual maintenance fee, this Facilities Management Company does not carry out any repairs inside of the apartment itself so, you would have to pay for that too.

I guess that is why there are so many apartments for sale and as low as 200 Euro per square metre.

Some examples here, but there are loads more from different agencies:-

Aspen Golf & Ski Resort Property Sales
  
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Rockmusician
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PostPosted: Wed Nov 04, 2015 1:51 pm 
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To get around all this hassle with short term rentals, why not get a flat in a big town like Varna and let it out on a long lease to someone who works in the town? You could drop over every month or so to check all's well and sort out any problems. Obviously, get a nice big deposit at the start of the lease.  
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Moscow_Wolf
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PostPosted: Wed Nov 04, 2015 2:25 pm 
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Rockmusician wrote:
To get around all this hassle with short term rentals, why not get a flat in a big town like Varna and let it out on a long lease to someone who works in the town? You could drop over every month or so to check all's well and sort out any problems. Obviously, get a nice big deposit at the start of the lease.


The average rental for a 1 bedroom apartment in Burgas for example would cost around 400Lv per month whereas with a properly managed holiday apartment, you could make that in a week albeit, it is a short season. The only place I know where you can receive a decent monthly residential rent is in the right areas of Sofia, but then, you pay far more to buy the apartment in the first place when in comparison to other cities.

Hence I was looking at an all year round resort for Golf, sightseeing and Snow activities. Discovered a very helpful and honest agent (working from the UK) who told me just how little those complex apartments are making in rent and that it is far better to market it and let it yourself. As he suggested, let it for 5 weeks per year and your annual maintenance costs are covered, but, I am not jumping into anything yet, need to do more research first.
  
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Rockmusician
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PostPosted: Wed Nov 04, 2015 2:45 pm 
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Yes, both options have their pluses and minuses. Like you say, find out the data in the real world of the actual returns of all options. If it's more on the dependable income side of things that you want, a long term rental residential property is the one to go for. The short term rentals scene always has more "If"s and "Depending on"s.  
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