Understanding Airbnb Property Management Agreements

Agreements are the official language that contains a promise of a deal. An agreement usually is between two parties that agree on some kind of business or service against a money deal. 

Airbnb is one business that falls under the branch of the business sector. Airbnb property is worth investing in if you can manage it properly. The Airbnb business pockets a handsome amount as a side income or if you are a free spirit and want to wander around with a promising source of income without having to set roots in one place. 

In this business, the owner having the authority to have agreements with more than one party managing Airbnb property can be a hurdle in letting you fly freely. However, there are ways in which you can manage and handle the property without being in the near vicinity.

The first and foremost important thing is the Airbnb property management agreement. Besides this agreement, there is also a contract between the owner and the guest. That is called a short-term rental agreement. 

An Airbnb property management agreement can be confusing; you might wonder about its purpose and the two parties involved. Worry no more; you will get all the details for understanding the agreement better in this article.

What is an Airbnb Business?

Airbnb business is when a person buys a property and starts to rent it out for a short period, mostly for vacationing purposes or stayovers. Property management is the responsibility of the owner. 

The owner of the Airbnb property assigns a property manager to handle the affairs related to guests, property, and other matters. The manager serves as a filler for the owner in case the owner is not around to handle matters. 

The management team also is under agreement and contracts. It is how the business sails smoothly even if the owner is not around to look after it themselves. 

It is important to be cautious of time and deadlines in Airbnb business and property management. Taking care of the property and the necessities is also vital. 

Airbnb Rental Agreement:

Airbnb is a service that offers people to stay at a rented place for the short term; it is necessary to have a rental agreement. This agreement serves as a contract between the owner and the guest. 

Short-Term Rental Property:

A short-term rental agreement is for 3 months or less. This is a contract between you and the property owner. It is a legally binding contract and has repercussions in case of failure of abidance. In case the owner is unavailable, the property manager can also sign the contract on the owner’s behalf. 

This agreement permits the guest to use the said property for the stated period. They can use it for staying purposes, but the guests must follow a few rules. These rules are decided by the owner and can vary as per the owner and Airbnb property. 

Some rules may include the following:

• No outside guests (except the ones listed on the agreement) will be allowed to stay. 
• No food inside the bedrooms or living room
• No pets
• No damage to the furniture and the furnishings

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The above is an example of a short-term rental agreement. It is a general format; this may be subject to alterations as per the parties. 

Parts of the Short-Term Rental Agreement:

Let’s discuss the short-term rental agreement in parts for easy understanding. There are not many pieces of the contract, and it is rather self-explanatory. 

• First Line: The first line of the rental agreement states the date and the name of the two people or parties that are getting into the contract. The parties may be more than two, and if the guests are not a family or more than one family, all the responsible adults should sign the contract to be held equally responsible. 
• First Paragraph: The owner will insert a welcoming note in this paragraph. The guest will read this and get the first impression of the owner, most owners do not meet guests in person, so this agreement is communication between the two parties. This paragraph will be the ice-breaker. The owner will also state the property’s name (if any) and its location. These details will be mentioned in this paragraph so the guest knows about the place they will rent. 
• Hosts Information: The host’s information will be mentioned below the welcome paragraph and the property introduction. Important things include the host’s name, contact number, email ID, etc. 
• Address Details: The exact address will be mentioned in this section. The address mentioned will be a full address, which can be used on Google maps to reach the location easily. In the second part of this section, detailed directions to reach the location will be stated. It will include famous spots or important landmarks that indicate the person is headed in the right direction. It is for the guests’ ease, so they do not have to face any issues while reaching their holiday home. OR, the agreement may state that the details about the Airbnb location will be shared about a week before the visit is due. 
• Details about the Airbnb Property: In the last section, in this part, the details of the property are mentioned, like; how many rooms, how many washrooms, and whether there is a backdoor, etc., will be mentioned. 
• Details about when the Guest will use the Property: In this section, details about when the guest will arrive, how many people will arrive, what their requirements are (if any special requests), their names, contact information, etc., everything will be filled. A few things must be mentioned, like; days of stay, arrival date, departure date, etc.
• Signature: There will be a section at the end where both parties must sign and put the date. 

There is also an Airbnb arbitrage contract pdf file that states that the price of the services provided in the same area by different managers may differ. These agreements save a lot of issues that may be caused later on. It is important to have good print agreements to save both parties from any hassle later on.  

Airbnb Property Management Agreement: 

Hiring Property Managers

Harnessing an effective management strategy for the Airbnb property ensures the success of Airbnb. 

A landlord of the Airbnb property needs to have a management that is there to run the business smoothly even if the owner is not there. This means that the owner will have to hire a management team. 

Airbnb property management agreement will have to be done with the management team. The owner will have to decide if they will hire the management team through a management company or would make the team by hiring each staff individually. 

Before we get into the details of the Airbnb property management contract, we should understand the responsibilities of an Airbnb manager:

• Managing the property’s listing and booking
• Pay heed to Marketing and advertising tasks
• Keep in touch with guests
• Making sure the guests enjoy their stay from check-in till check-out
• Making a list of all other tasks that need to be done by other staff members, like; cleaning, replenishing the necessities, etc. 
• The most important responsibility is to keep in touch with the owner and keep the owner updated about any incidents or booking changes, etc. 

In the Airbnb property management agreement, these nine parts should be included to summarise the contract. 

• Agreement Summary 
• Duration of the contract
• Landlords responsibilities
• Managers responsibilities
• Reporting responsibilities 
• Fees
• Termination and the reasons leading to termination
• Liability 
• Miscellaneous 

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The property management agreement is a long one. First, the owner and the management team need to discuss and put forward a full disclosure. This is a crucial step. It requires due diligence to avoid future grave problems (financially or otherwise). 

The team may be from a company, but it is important to know that the team is efficient and capable of handling things that require great attention. Anything might come up at odd hours at the Airbnb property. The management must be efficient in dealing with all sorts of situations. 

Let’s dive into the details of the Airbnb property management contract:

• State: Firstly, you need to mention the state where Airbnb will be managed. Every state has different laws for businesses, especially for land. The agreement will be constructed keeping the state laws in mind. Some states require the Airbnb property manager to have a real estate license, while some do not. 
• Date of Agreement: The date and year of the agreement will be mentioned in the first section. This is important as the agreement will be registered if the management team is hired through a management company. On the other hand, the management team will also need a date and year legally required for any official document. 
• Names: The name of the owner and the agent/manager will come in this part of the contract. The owner will have to be present to make this agreement as it is unlikely to have someone fill in it on their behalf; a lawyer can, however, do it. The agent or manager responsible for managing the rental Airbnb property will also sign their name in this part.  
• Details: This section discusses the rental property and the manager’s duties. It would state that the owner appoints the said agent or manager to fulfill managerial tasks. The manager will also agree to perform duties in the best faith and make the rental property successful against the amount the owner would pay. 
• Term of the Agreement: The term of the agreement will be mentioned here. For example, if the agreement is for one year, it would state the from the year 2020 till the year 2021. 
• Agent’s Responsibilities: Managers’ responsibilities will be discussed in this part in great detail. Apart from the responsibilities, the authorities that the owner entrusts upon the manager will also be stated here. These details will set the tone and work ethics for the manager and their team for the upcoming tenure of the contract. The responsibilities of the manager’s tasks and the team working under the manager will be under the management’s control. S/he will have to answer the landlord on behalf of their team. 
• Fees or Payment: The manager and the team will be working under a contract; fees paid to them will also be mentioned in the contract. If there are other forms of payment, like; a commission for getting a set number of guests in a certain time, this will also be stated in the agreement.
• Limitations: While the manager will enjoy the perks of being the supervisor, they will also be accountable for any extra expenses. It is better to keep a limit bracket for the manager; any cost that exceeds that bracket will have to be approved by the owner. The owner will have the final say in any high-budget expenses, like; changing a piece of furniture or getting a paint job, etc. 
• Set Rents: If the owner is absent or doesn’t want to be actively involved with the Airbnb rental property management, the manager will set the rent for the guests. The rent will be set keeping different factors in mind. The factors may include; other rental properties in that area, whether it is vacation season or off-season, etc.  
• Other details: Many other details will be included in this Airbnb rental property management agreement. These details may include; necessities that will be replenished for each guest, how often the property will be cleaned and refreshed, if the guests want to extend their stay, what will be processed, etc. 

These details will make the contract meaningful and set the expectations and demands for the services that will be required. The team will be under the supervision of the manager, but if the staff is hired individually, it may be necessary to sign a binding contract with each individual separately. 

The landlord also considers other factors before assigning the job to a person or a company. 

• Scope of Service: It is important to tell the service expected from the personnel. Imagining or thinking that it is understood that certain things are expected without telling them directly may cause issues. Being open about the responsibilities and the duties that need to be performed will give a clear idea to the manager. 
• Authority: While the manager is entrusted with Airbnb property and its management, it is important to lay out the boundaries. The authority given to the manager will have a limit. After that limit, the owner will have the decision-making power. Everything the manager does and every tenant the manager finds must be in the owner’s disclosure. Nothing should be kept hidden from the property owner. The manager must not do any secret or nefarious activity under the owner’s name. 
• Termination: The agreement must have a termination period. It is important for the rental agreement and the property management contract. With a termination date in sight, it is easy to keep business flowing. Having the guest check out as per the date will mean the property is available for new guests/tenants. A termination date for the manager’s contract will mean that the manager will know how much tenure they have for working for a certain landlord. If the manager performs their duty well, the contract may be renewed, and the manager may be reinstated for another tenure. 
• Property Damage: Any damage done to the property under the manager’s supervision will be handled by the manager. The guest staying at that time will be held responsible and have to compensate as per the rental agreement. If the damage is huge, the manager must get the landlord involved. These terms should be mentioned in the contract to avoid future misunderstandings. 
• Compensation: If the manager and the team have worked extra, they will be entitled to compensation. This should be mentioned in the agreement so that both parties are at peace. 
• Compliance with Law: The agreement should comply with the state’s law. It is important to run the rental business per the property laws to keep it clean and away from unethical and illegal situations.  
• New Agreement supersedes all previous agreements: When a new agreement is drafted between the owner and the guest or between the owner and the manager/company, it is understood that all previous agreements of similar nature are null and void. 

Why Do You Need a Property Management Contract?

A contract of short-term rental or an Airbnb property management agreement needs to be done so that both parties are on the same wavelength. Many forth-coming problems can be canceled because of an already existing contract and the agreement of both parties. 

Both sides of the contract signees are safe and consider their rights to be secure because of the agreement. A valid and officially initiated contract between the concerned parties are also legally correct.

Property management is tiring; not everyone can be entrusted with it. It is important to find the right property manager or Airbnb management company. Airbnb management contract lays out all the expected services from the property manager and how they are supposed to handle the property. 

Airbnb Management: 

Airbnb property management is more likely done by the rental property manager. It is a win-win situation. The owner gets to lay off their responsibility to someone else while enjoying a good income. The property manager gets a good income for managing someone else’s rental property. 

The management agreement is done between the landlord and the rental managers to ensure an official statement that defines the responsibilities and authorities of both parties. 

Property managers are responsible for managing the property in the following ways: 

• Listing the property: The property is a short-term rental property. It is important to have it listed in the market. Managing property listings and bookings is one of the rental manager’s most significant and base steps. 
• Taking care of the staff: As the supervisor and rental property manager, it is their task to ensure other staff members perform their tasks and duties well. As Airbnb management companies assign teams to the property manager, it is easier to deal with people from the same company. 
• Taking care of property: The property and everything within must be managed by the rental property manager. The furniture, land, garden, backyard, kitchen, bedroom, bathroom, etc., everything that needs maintenance and regular upkeep have to be managed and scheduled by them. The manager also has to check the things being done regularly. They cannot rely on the team; a follow-up check is necessary. 
• Replenish: As the Airbnb property hosts different guests and tenants all year round, some things must be present at all times. Necessary items like; fresh linen, bath soap, dishwashing soap, toilet rolls, coffee, tea bags, sugar, etc. These things need to be checked and refilled before every new check-in. 
• Reservations: Rental management is on top of everything, so they know the property’s availability. The manager would take bookings and get the property ready for check-in. They would also keep in contact with the tenant by sending them messages and emails at regular intervals. 
• Task assignment: The manager will assign tasks and make a schedule for each team member for optimal results. It is better to have the team at home altogether so that the manager can keep a check on things being done. 
• Aftercare: After each tenant leaves, the manager and the team must visit the rental property and perform the assigned tasks.

All these responsibilities and many other duties fall on the shoulders of the rental property manager. They need to be mindful of small things like the time of check-in and check-out, etc.; these things will hugely impact the overall success of Airbnb’s property management business. 

Final Word: 

The property management agreements bind two parties in a contract regarding the Airbnb business. The tenant is responsible for leaving the property without any damage or theft. The property manager is in charge of all the things in the property and regarding the rental reservations. 

The contract sets out the terms and conditions for the tenant and owner in the short-term rental agreement. The Airbnb property management agreement sets out the terms and conditions for the owner and the manager/Airbnb management company.

Once the agreements are set, it is easier to go further. The rental agreement can be made once and used for a new perspective guest; it will need to be filled every time. The document will be present. 

For the manager and staff’s agreement, a new agreement may have to be drafted by the owner, keeping the new manager or company in mind. 

The agreements being the first step, need the most attention. After the contract is finalized, it is a smooth sail after that. The owner doesn’t have to worry about any small tasks, but the owner should keep in contact with the manager regularly. 

FAQs:

Q1: How long does a vacation rental agreement last? 

A1: The vacation agreement lasts from 3 months to a year. It can also be less than 3 months, depending on the tenant’s requirement. 

Q2: What should the property management agreement include? 

A2: The property management agreement is detailed and includes everything from the responsibilities to the authorities. The agreement will define the manager’s role for the rental property and how the manager will fill in for the landlord. The manager will also serve as an agent between the owner and the tenant. 

Q3: Is it costly to hire a property manager? 

A3: Yes, it can be costly. But you need to do a cost-benefit analysis for your business. If the manager brings more value than the fees you are paying them, it is worth it. 

Q4: Who will make the agreement? 

A4: A lawyer or a good official firm will be contacted to form the agreement. The owner will have to sit with them and tell them their requirements and what they want to include. This is one-time work, and the agreement can be used many times in the future.