I'm not defending Las Palomas by any stretch of the imagination, but who do you think services those clients and don't they deserve a fee?
Any condo owners here?
- Thread starter warchild
- Start date
Queen of Kings
Guest
I would hope most of that is covered in the HOA dues that are paid monthly. Most of the rest of the stuff you quote is paid for by the renter. IMHO, 35% is crazy high.
ben21
Guest
That's the thing... I've rented "under the table" before when a friend booked a unit for us and it can be a mess. It's Mexico we're talking about here, inevitably something always goes wrong with a rental and it's better to just be able to call the front desk and have them come fix it. Also you don't have to pretend to be a "friend of the owner", etc... I think as an owner, your probably better off doing this anyway. You'll get more legit renters (with credit cards on file) if something goes wrong.
Penasco Services
Guest
I agree that a business deserves to be compensated for their services. What I don't agree with is an HOA who is not a financial partner in my property telling me that I can only rent via their service and at a price or percentage they dictate.
I am not suggesting anybody should rent under the table. I feel every owner should be in compliance with both immigration and tax law. The fact that an owner should feel the need to lie about a renter (encouring them to say they are friends or family) is also insane. It should be the owners decision if they elect to hire a property management company or rent on their own.
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Mis2810 is correct. Most of the stuff mentioned by her as included in the 35% fee is NOT covered by HOA dues. Other than maybe the phone or internet.....that is included in HOA dues at some resorts. And even at that, the phone is usually just for calling the front desk or other rooms.
Obviously, you do not understand how an HOA works. Hopefully, you would not purchase at a place knowing that you had to use their service at the price and percentage they dictate. But if you did (i.e., you did not do your due diligence), you could go the route Jim talked about.
Penasco Services
Guest
I fully understand how an HOA works. Las Palomas does not allow self rentals. I find it ridiculous that an owner at Las Palomas can generate a lead to rent their own property and then be forced to hand the customer off to an in-house agency. The owner is then charged a high commission for the very deal that they created.
If a rental agency or an HOA did not contribute financialy to the purchase of my condo they should only share in the reward or profit of said condo when I elect to use their services.
I am not some rogue condo owner who feels they can do anything they want. I practice what I consider to be a good neighbor policy. My condo should be held to the same occupancy restrictions, tax laws and other policies as any condo listed with a rental agency. That said, it is my absolute right to rent my own property. Quoting the overhead of an agency that an owner does not want to do business with does not justify the commission they are forced to pay.
In Mexico an HOA is a not for profit entity. Peñasco is not located in the United States and the laws regarding HOA's are not the same as they are in the states. You can write HOA regulations restricting self rentals but if they run contrary to Mexican law they are invalid.
I did lengthy due diligence on every resort before purchasing. I hired a prominent Mexican attorney and a separate Notario early in the process due to the unfortunate losses incurred by other buyers. I did not rely on any statement of a real estate agent as though it was fact. After all, they were attempting to sell a property and earn a commission. What was clear from my due diligence is that there are many owners and HOA's who try to circumvent Mexican law.
I understand there a number of owners who have found value in the services of a rental agency. There are also a growing number of owners who no longer find value in these services and prefer to manage their financial investment independently.
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dry heat
Pigeon coup coordinator
If you don't do the referral you keep 65%.
dry heat
Pigeon coup coordinator
I think many owners are happy with Las Palomas. They have the highest ranking on Trip advisor, have the highest % of rentals, have the highest avg. of rental income and give owners a very favorable % if they refer their own guests (75% of the rental income). For the 25% the resort takes, that includes 24 hotel services, daily maid service, 24 maintenance service and other benefits. I don't think 25% or 35% (the % the resort keeps if they refer the guest) is greedy or unfair. Owners benefit from everyone not undercutting each other by self renting. We all have a minimum rate we can charge, we all have to keep our units current and in great shape (units are frequently inspected). I think having a common base helps with having a great client experience for most guests (maybe this is one reason why the resort is ranked #1 among visitors (tripadvisor). Of course nothing is perfect... no one is shooting for that goal. Everyone will have their own preferred way of doing things. However among a development with hundreds of owners, things are good now.
That's great for owners who have time to do this on their own - if they want a full month of rentals all the time it is extremely time consuming. But many owners don't have time to coordinate cleanings, make sure their cleaning people have supplies, answer all the booking requests and collect money on VRBO, HomeAway, FlipKey, AirBnb, Facebook, etc. I would have to say the majority of owners like to sit back and know all that is taken care of and just wait for their 65% checks to be sent every month.
Back to your other comment - HOA dues does not pay for rental company employees and the rental companies costs. HOA dues covers the water bill, maintenance of the common areas, and whatever else is included - but in no way does dues cover rental company expenses - that would be ridiculous. How would a non-renting owner feel about having his monthly dues used to pay for a rental company maintenance employee?
Penasco Services
Guest
I have no argument with anyone who uses a rental agency or property management firm. They clearly provide value to many people for a variety of reasons. My argument is against an owner being forced to use a rental agency or being forced to give up a portion of their earnings if an owner elects to rent on their own.
I never discussed HOA dues. We are discussing Las Palomas only. My understanding is that the HOA at Las Palomas runs the rental program. This was the primary reason I elected to not purchase at that resort. Owners at Las Palomas are NOT permitted to rent on their own and MUST rent through the rental program which is administered the by the HOA as a separate for-profit entity. This was the basis for my comment...
ben21
Guest
What Las Palomas probably realized is that they're going to incur on site costs (security, common area maintenance, etc) from all renters. Now when somebody uses another agency, or pockets all expenses, how does that get paid for?
Also, Dry Heat mentioned that Las Palomas is the highest ranked property on Tripadvisor. This is probably because they're able to offer guest assistance on site, have a consistent product for renters, etc... What many guests may not understand is if you rent a unit through Oceano, at say Bella Sirena, and then something goes wrong, they can't just go to the front desk and get it taken care of. To their amazement, they need to either place a call (do they have cell service?), or trek across town to tell somebody at the office over by Las Conchas. Of course the problem probably isn't addressed until their vacation is over. And there you have it, 2* tripadvisor review.
dry heat
Pigeon coup coordinator
(Las Palomas) the resorts bylaws state that if you rent, you must rent via the approved rental company. Neither the rental company or the HOA are related (the HOA is controlled by the owners and the rental operator is privately held). An owner who rents must meet the minimum furnished requirements for their condo (ie. it has to be in great shape, flat screen tv's, bedding, etc). If one is behind on their HOA dues, one cannot rent. Even better for those who own at Las Palomas... the impact collected by the rental operator has provided over 10% of the HOA's total budget. Again, the HOA does not run the rental operator (two different companies that are not related). At one time they where, however this has not been the case for at least 4 years. Each phase is on pace to have over 1m in reserves, keep in mind that we just have over 100k a few years ago. All buildings have new railings, new paint and we have plenty of money to offset any major projects. Non rental owners are happy that the rental operator is contributing their fair share for impact on the resort. When you have 800+ units you have to have some sort of guidelines regarding rentals and rules in general. So far I would say things are a lot better at this resort than in years past. The resort had over 100 active listings a few years ago and now we are less than 30. Nothing is perfect and we still have plenty of room for improvement. But when we compare to prior years, life is A LOT better.
Penasco Services
Guest
I agree with your logic Ben but what has been left out of the discussion thus far is that Las Palomas is not a hotel nor is it time share. These condos are independently owned. Some guests may prefer to book through an agency knowing that problems can be addressed by on-site staff while other guests understand the condo is owner operated and problems must be addresed by the owner.
Dry Heat has a valid point about the ratings on Trip Advisor but it only addresses one part of the equation. Is there a website where we can ascertain owner satisfaction? In this thread there is commentary by a previous owner at LP who indicated renting their unit was a headache.
The thread is not meant to represent a bashing of rental agencies or Las Palomas. It is about disclosing what existing condo owners know to assist someone new to the community with information related to owning in RP.
I feel that we should encourage people to come to Rocky Point for what it is TODAY and not lure people with promises of what the future holds. Wouldn't it be a great place if potential buyers were given honest and complete information about things so they can make an informed decision about their purchase? Doesn't that truly make Peñasco a better place?
Penasco Services
Guest
I must say that LP is one of the better looking resorts and I appreciate the system you are trying to keep in place to maintain standards. At the time of my purchase the rental program at LP was indeed run by the HOA and I did not feel it was a good fit with my needs. I am glad that has changed.
Yup, everything included!
Our management company sends out a quarterly cost report. We keep an eye on how we are doing against the budget.
By the way, 8 partners times 6 weeks each = 48. We shut the place down for 4 weeks in August. No one really likes august for the heat and the cost of running the AC is absurd. We forecast for and spend 4$k to $5k during those 4 weeks for general maintenance.
Wow, I got a little brain damage reading through all of the condo, HOA, rules and stuff above.
Out 8 share has a great operating agreement as a start. When we have an issue, we send around an email to the 8 partners. After a couple volleys, its resolved. No lawyers or legal opinions.
Easy peasy
I have owned rental in Penasco since Spa. I never rented under the table. Sure I had things broken or turn up missing but each of my property manager handled it just fine. I did have 2 units at LP but I think they were a problem because it was such a large complex. I still have friends there and they say it all worked out. I like the smaller places like Spa. Had it 6 yrs and very little damage(one bedroom). Bella seems to get a quieter different crowd. I just could not justify having anything down there if I didn't rent it. We just do not go down that much. Our trips are based on how much fish we have in the freezer.