Buy a Disney area STR with existing bookings

[Karah Kramer]

My husband and I are looking to buy in the Disney area (currently looking at Windsor Hills, Championsgate, Solara etc.), and noticed that many of the listings say that existing bookings convey, if we stay with the existing management company. I'm curious what happens if we wanted to change management companies:

a. Does the existing management company get first dibs to try and rebook those guests to other properties they manage? Or do we get a chance to try and retain the bookings? What's the experience for guests? 

b. Has anyone heard of successfully "buying out" the current PM company? I.e. assuming $50K in bookings, that would be +/- $12.5K in commissions. I'm wondering if there are options to buy that PM out to keep the bookings with the house. 

We're not opposed to talking to the existing PM, particularly since it would be smooth to keep the existing relationship in place, but we don't want to be locked in. 

Thanks,

Karah

[Ryan Moyer]

Quote from @Karah Kramer:

We're not opposed to talking to the existing PM, particularly since it would be smooth to keep the existing relationship in place, but we don't want to be locked in. 

This is something you need to decide ahead of time, so you can include language about it in your offer.  Most management companies have contracts that hold the owners by the balls, and canceling the bookings is going to mean a penalty will need to be paid to the PM.  You're going to want to make sure that is an expense for the seller who hired that PM (and it should be a drop in the bucket to them with the cash they're making on the sale if they didn't buy recently), not a liability of yours.

This is also a good lesson on why, when you do take over the place, you either self manage, look for a manager that is willing to do a co-hosting setup where you still own the bookings, or if you do decide to go the more traditional PM route, examine the part of the contract that covers these things when choosing the manager rather than focusing on just commission and skimming over the rest.

 A lot of management companies set up their contracts so it is as difficult and expensive as possible to leave them.  You want a manager that you stay with because you're happy with the job they're doing, not one that you stay with because it's too much of an expensive PITA to leave them.