Summit County Mountain Retreats (SCMR) is excited to report its rental numbers for the past year. Some were skeptical of our low cost / high service business model and believed that we could not deliver on our promises. We now have a track record managing approximately 50 properties in River Run, Timbers and Lone Eagle. We have outstanding numbers to back up our business model. Now has never been a better time to see the greener grass on the other side!
In the first chart below, we evaluate Keystone Resort Property Management (KPM) income figures as distributed by KPM with SCMR figures for a 12 month period. In the second chart, we stack the odds in favor of KPM and compare SCMR’s lowest producing unit with KPM’s average unit. All comparisons are based on the same size unit in the same building. The difference in net revenue to the property owners is no surprise to us. We believe that as the owner, you should enjoy maximum return on your investments.
2008/09 Performance KPM vs. SCMR Highest KPM, 2 bedroom, 2 bathroom Highest SCMR, 2 bedroom, 2 bathroom KPM Gross Revenue $28,558.00 SCMR Gross Revenue $35,718.94 Management fee for KPM 50% Management fee for SCMR 9.75% Annual Marketing fee for KPM $800.00 (estimate) Semi-Annual Marketing SCMR $650.00 Annual misc fees for KPM $600.00 (estimate) Monthly Maintenance fee $125.00 Net Revenue $12,879.00 (estimate) Net Revenue $29,436.34 OWNERS USE 2 nights* OWNERS USE 39 nights* * Typically the more an owner uses his/her condo, the less revenue potential.
Let’s round these numbers down for easy digestion. The point should be clear. The net revenue for SCMR’s two bedroom unit in Buffalo lodge is about $16,000 more than a comparable two bedroom unit managed by KPM. In other words, the net revenue for SCMR is almost two and a half times the amount of KPM’s net revenue. Furthermore, the owner of the KPM managed condo only used his/her condo 2 nights in the entire year, while the owner of the SCMR managed condo used his condo for 39 nights. KPM proponents might say that we are unfairly comparing units. Well let’s compare SCMR’s lowest performing two bedroom unit, to KPM’s average unit in the same building (KPM did not provide figures for its lowest performing unit).
2008/09 Performance KPM vs. SCMR Average KPM, 2 bedroom, 2 bath Lowest SCMR, 2 bedroom, 2 bath KPM Gross Revenues $24,881.00 SCMR Gross Revenue $23,957.43 Management fee for KPM 50% Management fee for SCMR 9.75% Annual Marketing fee for KPM $800.00 (estimate) Semi-Annual Marketing SCMR $650.00 Annual misc fees for KPM $600.00 (estimate) Monthly Maintenance fee $125.00 Net Revenue $11,040.05 (estimate) Net Revenue $18,821.58 OWNERS USE 26 nights* OWNERS USE 29 nights* * Typically the more an owner uses his/her condo, the less revenue potential.
The lowest performing unit with SCMR produced $7,581.53 more in net revenue than the average unit with KPM. Another way of looking at this is the lowest performing SCMR unit produced net revenues of about 67% more than the average owner who uses KPM’s services. Additionally, the owner of the SCMR unit used his condo 3 more nights than the KPM managed condo.
You may be wondering why there is such a large difference between SCMR’s highest performing unit and its worst performing unit. The answer is quite simple. SCMR markets each unit individually. Therefore, it will generate more or less income based on its particular merits. If a unit has great views and has been upgraded, then it should make more. If a unit is facing the parking lot and has all the original furnishings, it should make less. Despite these facts, it is still true that owners of any quality unit are likely to do much better with SCMR instead of KPM.
Also, with SCMR’s program it makes sense for owners to continue to invest and upgrade their units because they will see a return on investment as is illustrated in this case study. Imagine with some new beds, new TV, maybe some new furniture and appliances, you may spend $6K to $7K, but within one year you may have already paid for these upgrades, and you will continue to see a return on your investment year after year. At SCMR we are a FULL service management company, so if you need something, we will meet all your needs from start to finish. We are here to serve you.
If you have been hoping for personalized service from people who care about your best interests and don’t have their hands tied by “corporate policy,” then we encourage you to call us and discuss how SCMR can serve you.
What’s going on with SCMR for 2010?
In 2010 we are expanding our marketing presence and adding additional services that have been requested by the owners we represent. It is our constant goal to continually innovate as we grow and learn.
As of May 15, 2010 SCMR will implement a base rate increase. The new rate will be 12.75%. All new and existing clients who enroll with SCMR prior to this time will be locked into our original rate of 9.75% until November 15, 2011. We are offering this lock in rate as a gesture of appreciation to all our clients who took a chance on SCMR when we were new and untested. Will rates continue to increase? It is unlikely that SCMR will increase its rates again. For our first clients, they are only seeing a rate increase after 3 years of being with us. We believe at this point we have successfully exited our start-up phase and have a strong grasp of all aspects of our property management business. A fair comparison of SCMR’s cost structure verse our competitors will show that SCMR provides more service at a lower cost than anyone else.
Call us today! Don’t hesitate. Now has never been a better time to see higher returns on your investment and more personalized service.
Posted by William on 4/14/2010 8:42:12 PM 0 Comments