Own a house in another city? Here’s what it costs to manage it

Summary

Remote property owners can outsource vacation-rental operations or long-term tenancy management, but these services and fees come at a high cost.

For non-resident Indians (NRIs) and people who own a house in another city, managing a property remotely can be challenging. Tenants may default on rent, urgent repairs may be needed, or a house may remain vacant for months. Property management companies offer to handle these responsibilities for a fee.

These services are broadly offered in two forms. The first involves converting and managing a property as a bed and breakfast (BnB) or guest house for short-term rentals. This can be useful for second-home owners who visit occasionally and want to earn rental income while ensuring the property is maintained in their absence.

The second involves end-to-end management of conventional long-term rentals–from finding tenants and collecting rent to handling repairs and tenant-related issues–without requiring the landlord's regular involvement.

However, these services come at a high cost. Owners need to weigh the fees against the convenience of outsourcing property management and the rental income they can expect to earn.

What is offered?

In the first category, short-term rental management companies take over the day-to-day operations of running a property as a BnB or guest house. They list the property on platforms such as Airbnb, MakeMyTrip and Booking.com, set nightly tariffs, manage reservations, coordinate guest check-ins and check-outs, and oversee housekeeping, caretakers and maintenance. They also handle guest complaints and provide owners with booking and earnings reports.

The scope of services differs across agencies and packages they offer. Ethan Barman, founder, Hostizzy, a vacation rental management company, said they offer a choice between one-time setup, co-hosting and complete management.

“In the first option, we get the property listed and priced, and the owner runs it themselves. In the other two packages, we take over housekeeping, guest management and on-ground supervision as well, including adjusting pricing with demand, weekend and festivals, and revenue sharing ranges from 15%-30% depending on the range of services the owner signs up for.”

Most vacation rental management companies work on similar models. Gaurav Marwah, co-founder and director of VacationBuddy, another vacation property management company, said the company also handles property photography, marketing and owner reporting, apart from day-to-day operations.

For conventional long-term rentals, the scope of services differs, with the company's involvement largely limited to managing the tenancy and property maintenance. This includes finding tenants, conducting background checks, completing paperwork, handling tenant queries and ensuring timely rent collection. At the end of the tenancy, the company oversees the handover, assesses damage and helps settle security deposits.

Pryank Agarwal, founder and CEO of Housewise, which manages long-term rentals, says the service is designed for owners who live away from their properties and need dependable local assistance. “We represent the owner in a tenancy, so that they don’t have to be involved. Every maintenance or society-related issue, major or minor, is handled by us,” he said.