Vacasa Owner Contract: Everything You Need to Know

Vacasa is one of the most recognized names in the US vacation rental property management industry. However, before hiring this company, real estate investors need to review and understand the Vacasa owner contract to know what they are getting into.

In this article, we will review the Vacasa owner contract which comprises two parts: (1) A general vacation rental services agreement and (2) A customized management proposal. We will look at both parts of the contract to understand what each clause means for property owners and their short-term rentals. We will dive into the rights and obligations of both parties to the contract and the financial side of the agreement. Finally, we will discuss how easy or not it is to get out of a contract with Vacasa compared to other top Airbnnb management companies.

Vacasa Owner Contract Rights and Obligations

One of the most important parts of the Vacasa owner contract which property owners need to understand concerns the rights and responsibilities of the Airbnb management company. In this way, owners will know which aspects of vacation rental property management the company covers and which it doesn’t. 

Vacasa Rights

The vacation rental services agreement provides Vacasa as the property management company with the following rights:

• Charge guests and retain additional or variable fees like cleaning fee, booking fee, pet fee, hot tub fee, late check-out fee, concierge service fee, etc.
• Use marketing channels that might charge guest fees that will be retained by the channel.
• Issue full or partial refunds to guests where it is reasonable to address guest dissatisfaction.
• Place a property in “out-of-order” status at any time, based on its sole discretion.
• Implement emergency repair on its sole discretion where emergency repair refers to a repair needed to protect the property or its contents from damage or destruction or return the property to a rentable condition before or during a guest stay.
• Withhold amounts from rental proceeds to maintain a reserve balance (set at $500 by default) that can be used by Vacasa for the payment of maintenance and repair costs.

Vacasa Obligations

Under the provisions of the Vacasa owner contract, the property owner authorizes the company to perform services related to the management of the vacation rental.

The following services are the responsibilities of Vacasa:

• Process reservations and collect payments from guests for stays.
• Create marketing materials for the vacation rental home including electronic and printed materials, descriptions, photos, virtual tours, etc.
• Promote the property on Vacasa.com and third -party marketing channels to maximize exposure.
• Determine rental rates based on the property characteristics and market demand.
• Set and collect a cleaning fee from guests.
• Furnish housekeeping services, basic light bulbs, and guest supplies including soap, dishwashing detergent, bath tissue, paper towels, and garbage bags.
• Collect applicable taxes from guests, file sales and lodging tax returns, and make sales and lodging tax payments on behalf of the short-term rental property owner.
• Manage guest relations including guest communication, check-in and check-out management, addressing guest issues, and guest reviews management.
• Perform or arrange on the owner’s behalf and expense ordinary property maintenance, repairs, and services. The cost of repair items should not exceed $100 per item without authorization by the owner or without being an emergency repair.
• Provide a monthly account statement to the owner.

Vacasa Contract Owner Rights and Obligations

Before you hire Vacasa as your Airbnb manager, understand your own rights and responsibilities as well.

Owner Rights

Vacation rental property owners have the following rights under the Vacasa owner contract:

• Use their home for as long as they want: Owners can book their home for personal use for as many days as they want as long as there is no existing reservation for this time period. However, owners have to comply with Vacasa’s check-in and check-out procedures and pay a cleaning fee after their stay.

Owner Obligations

The Vacasa vacation rental services agreement obliges property owners to:

• Furnish the short-term rental with all required utilities such as gas, electric, sewer, water, cable, internet, trash removal, and pest and termite control.
• Furnish the property with suitable equipment, appliances, furniture, and furnishings. Vacasa will provide a list of required items and reserves the right to supply any missing items at the owner’s expense.
• Notify Vacasa before listing the property for sale to ensure uninterrupted reservations.
• Participate in Vacasa’s insurance program unless opting out.
• Not market or rent the rental home to others without receiving Vacasa’s written permission.
• Remain responsible for all physical, legal, and financial matters such as cost of repairs, maintenance, furnishing replacement, compliance with applicable laws and regulations, deed restriction, and HOA bylaws and rules. This includes getting required short-term rental licenses or permits. While Vacasa can help with this, it is not obliged to.
• Not enter the property or immediately adjacent land during guest stays without coordination with Vacasa to retain guest privacy.
• Notify Vacasa of change of address to ensure the company can reach them.
• Honor existing reservations.

Vacasa Contract Financials

The personalized management proposal, sent along with the vacation rental services agreement, provides some of the most important financial details related to hiring Vacasa property management.

Estimated Rental Income

In the management proposal, Vacasa provides an estimated annual gross rental income. The estimated gross income is presented as a potential range and is based on the performance of similar properties in the same market. While the company does not commit to this range, it is in their best interest to boost rental revenue as they define the property management fee as a percentage of the gross rental income.

Vacasa also offers an estimate of the annual net rental income, which is simply the difference between the estimated annual gross rental income and the management fee.

Property Management Fee

The Vacasa management proposal includes the requested property management fee. This is calculated as a percentage of the annual gross rental revenue. The rate varies between property types and markets, and in most cases it is between 25% and 35% of gross income.

Rental Proceeds and Payments to the Owner

The Vacasa vacation rental services agreement defines rental proceeds in two different situations. In case of bookings from the Vacasa website or by phone, rental proceeds include the total rent paid. In case of reservations from a channel, rental proceeds means the total rent paid minus fees and commissions charged by the channel. In both cases, rental proceeds exclude sales, lodging, and other applicable taxes, cleaning fees, and other fixed or variable charges.

According to the Vacasa owner contract, the property management company will initiate the payment of the rental proceeds minus the management fee and expenses incurred on behalf of the vacation rental property owner by the 10th of each month. The transfer of amounts payable to the owner will be done through a direct deposit.

Vacasa Contract Property Management Services

The management proposal differentiates between two different property management services that Vacasa will deliver to vacation rental property owners: essential services and premium services.

Essential Property Management Services

They include the essential services in the management fee discussed above. They cover all the basic requirements of running an Airbnb business.

Essential services provided by Vacasa include:

• Help with short-term rental regulations and licensing
• Professional online listing featuring high-definition photos, a 3D property tour, and SEO-friendly copywriting
• Listing distribution and synchronization across major channels like Airbnb, Vrbo, Booking.com, etc.
• Hyper-localized digital marketing including SEO, email, and social media
• Top-notch home care team including a local property manager, professional housekeepers, and maintenance technicians
• Guest screening
• Professional cleaning and restocking between stays
• Home damage coverage
• Regular home inspections
• Monthly payment plans
• Desktop and mobile app for guests
• 24/7 guest service including a dedicated reservations team
• 24/7 homeowner support
• Personalized online owner account (for desktop and mobile app) with calendar, bookings, income, tax documents, maintenance requests, etc.

Premium Property Management Services

Short-term rental property owners can opt for the premium services offered by Vacasa as they are not part of the essential package. Premium services are paid for additionally.

They include:

• Interior design: Vacasa can curate a look to make a vacation rental home stand out. The fees start at $99.
• Smart home: Vacasa can provide and install a smart lock, a Wi-Fi router, and a noise detector.
• Linen program: Vacasa can supply hotel-quality towels and sheets. The cost is $1,039 for the first year and $520/year for consecutive years.
• Insurance: Vacasa gives access to affordable coverage through Rental Guardian. The details and cost are discussed below.

Vacasa Contract Insurance Addendum

The Vacasa owner contract contains an addendum dedicated to the Accommodations Protection Program in which each owner gets enrolled unless they explicitly opt out of it. The vacation rental insurance program provides the following coverage:

• Up to $1 million per occurrence in liability arising from bodily injury
• Up to $1 million per occurrence in guest-caused damage to the home
• Up to $25,000 per occurrence in guest-caused damage to the home contents
• Up to $15,000 per occurrence in bed bug remediation including lost revenue

To cover the costs of the insurance program, Vacasa will deduct per-night charge for completed stays from the rental proceeds. The cost is $7.00/night for homes with 2 bedrooms or less and $8.54/night for homes with 3+ bedrooms. In case of Airbnb long-term rentals, the fee will be capped at 30 nights per reservation.

Vacasa Owner Contract Termination

The Vacasa vacation rental services agreement remains effective for five years after signing.

Both Vacasa and property owners can terminate the contract with a 90-day advance written notice. Should owners opt out of working with Vacasa, they have to honor all guest reservations with a check-out date before the termination becomes effective. This refers to reservations for which Vacasa has received a monetary deposit.

Takeaway

The Vacasa contract owner is a relatively standard short-term rental property management agreement which details all the rights and responsibilities of both parties. Real estate investors need to read through both parts - the vacation rental services agreement and the management proposal - and make sure that they understand and agree with all details. In case of any unclarity or doubt, talk to a Vacasa representative and ask for additional clarifications. It’s important to only sign a contract with which you feel 100% comfortable in order to optimize your experience as a vacation rental property owner making passive income.