Why You Need a Villa Management Company
November 28, 2008
The prospect of owning a holiday villa or second home, especially in place like Bali, should be a dream come true. But the dream doesn’t always live up to expectations and nightmares can quickly happen. Here’s look into some reasons that dreams can turn bad and why working with a professional villa management company will help you to avoid the pain.
Let’s assume you are not living full time in the villa. Let’s also assume that you want to rent the property whenever you are not using it to recoup your investment. Cue the management company. No nightmares yet. But then the contract gets taken out and signatures are expected. It is always a good idea to thoroughly read the contract, small print included, so that owner and management company expectations are crystal clear from the start. One of the most common reasons for bad relations with owners and managers is misunderstanding.
Villa management companies are there to give owners peace of mind, and if the villa is to be rented, in order to generate revenue. Your personal goal is to have your villa available when you need it, make sure it looks fantastic when you return to it, and at least have the running and repair expenses covered by good rental income. Somewhere between these basic expectations and real-life circumstances, is where nightmares are controlled – or happen.
A tropical environment with salty high humidity, heat, and wood-eating termites is a hostile environment for villas and the physical impact begins the moment they are built. Ongoing maintenance of wood, metal, painted surfaces, electrical equipment, and more, need constant attention, quick preventive care, and occasional replacement. The threshold between well-maintained and out-of-order is often much shorter than anticipated. Expenses for a myriad of operating costs mount up more quickly than expected. Electricity, staff salaries, insurance, satellite TV, supplies for housekeeping, gardening, pool care and many other ongoing charges become regular monthly overheads and all too quickly get out of control. All of these financial details need to be closely monitored and accounted for through on-time payments and ongoing fiscal reports. It also helps if the management company is sizable enough to command reduced rates, based on volume and related economies of scale.
Typically a villa’s operating costs can be offset through rental occupancy level of 25% to 30%, meaning the management company must be capable of marketing your property successfully. Depending on where the villa is situated and countless other aesthetic and service variables, it will fetch a certain holiday market value and a nightly rate to match. So, acquiring enough paying guests is essential. However, new luxury villas are being delivered to Bali’s hospitality market exponentially and competition progressively more intense and sophisticated. It takes more experience and innovative marketing strategies and tactics to attract guests to your property. Not something to be left to amateurs. Your new Bali villas obviously built by professionals, so why stop there.
Choosing a reliable, professional villa management company will guarantee you sleep well and experience your well-deserved villa owner’s dream.
Written by Guy Nelson – Exotiq Villa Services
Featured on HOT Property Vol. 10 – 2008
