Hey Bigger Pockets community, I’ve been a long time member, but rarely post. Last year I went through a transition from a small local vacation rental management company to Vacasa as a result of a buyout, and I’m hoping this information will be helpful to others who may find themselves in that situation. Fair warning, this is quite a long post.
A little background – I’ve been doing long term BRRRRs for over a decade and decided to get into STRs about 4 years ago. I partnered with a boutique local vacation rental company that had ~20 units at the time, and they helped me get ramped up in a relatively small town by sharing their connections for everything from excavating to decorating.
Over the next 3 years, I expanded to 4 SF STRs and their company expanded to over 50 units under management. As they grew, some things about the company were drastically changing, and it was evident something was in the works behind the scenes. At the time, I didn’t know exactly what, but in May or June of 2022, I received the phone call that they were selling the business to Vacasa.
I’m not the knee jerk reaction type, so I figured I’d ride it out and see what happens. Vacasa brought in their “transition team” to retrain the local staff and take over communication with the owners. They had a sales guy, Jordan who has since been laid off, that promised all kinds of things that they were not able to deliver. The biggest one being that their national presence and state of the art technology would drastically increase bookings.
July 1 was the official cutover date, and what resulted was the exact opposite of their pitch. The difference in price to book any of my properties on July 1 verses June 30 was an increase of over 30%, all of which went to Vacasa. Those cost increases were raises to the cleaning fee, implementing a nightly hot tub fee, implementing a nightly damage waiver fee, making the pet fee nightly, and adding a 12% booking fee which was on top of the nightly rate and the other fees. That’s right, a fee on top of a fee. My understanding from others who still have units under management with Vacasa is that the booking fee has recent increased to 15%.
At the time, I had recently brought online a 4br sleeps 11. As a result, June was my best month ever from a revenue and profitability standpoint, and the booking trend for July was on track to beat it. Immediately after the July 1 go live date, my new bookings came to a screeching halt. After a couple weeks of dismal bookings, Vacasa’s solution was to lower the nightly rate, while keeping their fees the same.
During this time, I had many conversations with the transition team, and they understood the impact this had owners. Unfortunately, they claim that the fee structure is company policy and that it is standard across the country. While it appeared that their goal in purchasing this local company was to add fees on top of the already high management percentage, they were willing to negotiate if I would sign a new contract with them. They verbally offered 20% commission and I got to keep 100% of the pet fees (please note this may or may not be typical, and was indicated it was based on my portfolio size). When they sent over the contract, it was for 23% and 100% of the pet fees. I felt like this was another bait and switch.
On August 10th, I turned in my termination notice. My contract that Vacasa bought from the local PM required a 30-day notice and either I honor the existing bookings beyond that or pay them the commission on cancelled bookings. Those remaining booking were made prior to Vacasa taking over, so they were at good nightly rates without all of the additional fees. For that reason, I elected to keep them.
The transition from Vacasa started very smoothly. They were surprisingly accommodating considering I had just terminated their contract. As with most property managers, they own the listings and the pictures, but given some updates I wanted to make for the two 3-year-old properties, I didn’t even ask for their pictures. They were flexible with blocks for maintenance and staging for the new ones, and one of their maintenance guys even helped me swap out furniture in one of the units. Fortunately I had scratched the part of the contract about them owning the property names, so I got to keep those. Subsequent people have left and kept their property names, so I don’t think they are pursuing those who do even if they have a contractual right to do so.
After the 30-day period was up is when things started to get a little messy. I don’t think it was deliberate, just a result of staff turnover and general degradation of quality. I changed the locks, and gave them codes for each guest. On more than one occasion, they gave the guests the code to the old locks, and when the guest called, the person they talked to had no idea why it wasn’t working. This resulted in guests standing around outside for over an hour, and in one case getting impatient and breaking into the emergency lockbox for a key to the house. On another occasion late at night, the national call center couldn’t get ahold of the local rep, and didn’t bother calling me. Instead, they moved the guest to a different property, and attempted to deduct the revenue from my account. After several calls and emails, that was credited back.
Housekeeping took a turn for the worse as well. On two occasions they folded and left damp towels for the next guests. Fortunately the new PM’s quality check caught one, and I happened to be there changing locks and caught the other. On another occasion, a housekeeper literally took the pillows out of one of the properties, and they have no idea why or what she did with them. The bedding and towel inventory at transition wasn’t what I had procured for the properties, even the new one that had only been online for 6 months. They were clearly mixing linens, so I got worn out towels and old stained linens that had to be replaced. After that, I refused to allow Vacasa to do the housekeeping on any remaining reservations. They gave me a credit for each remaining booking, and the new cleaners took care of housekeeping between guests.
Overall, I can say that I am glad I terminated with Vacasa as quickly as I did. After evaluating several options, I elected to sign up with a newer smallish local property management firm. I know there is a big push in these forums to self-manage, but I don’t have the bandwidth and there is too much opportunity cost to consider that. At the same time, I realize that no property management company is going to care about my properties as much as I do, but I picked one that focuses on quality, maintenance, and guest satisfaction over high occupancy and driving profitability. I did look at partnering with a co-host, but there are some liability and redundancy benefits that come from having an insured company with multiple people on staff.
While it took a few months to get everything back up to speed with new reviews after the transition, I ultimately had my best month ever in October of 2022. In November I brought my newest project online, a 4br sleeps 13, and I'm cautiously continuing to grow the STR portfolio.
As for Vacasa in that area, they recently laid off all of the original office staff from the prior property management company. They are down to less than 25 units showing available this coming summer, which is less than half of what they started with last July. That is even after bringing some new properties in that were not part of the original portfolio that they purchased. The owners of the original property management company sold their two properties, but Vacasa is still managing them for the new owner.
Hopefully this is helpful. If you find yourself in a similar situation, please do not hesitate to reach out. I’ll do my best to help anyone who is going through this or has questions.
