Guaranteed rental

Through a wholesale contract a property owner is able to receive a guaranteed sum over the term of the contract. This takes the risk out of trying to rent the property him or herself, often with financial discount. Depending on how the contract is structured, the property owner may also shift more or less of the costs, maintenance, repairs, and other property owner responsibilities to the acquirer during the term of the contract. One potential downside is that by selling the right to rent to a third party, the homeowner loses some control over how that property is managed during the term, though this can also be negotiated and agreed within the contract.[4]

Through a wholesale contract a property manager is able to acquire new inventory to manage on a retail basis, increasing revenues. When acquired at the right price, such contracts can also increase profit margins. By purchasing the weeks during the term, the manager has increased control over how the property is managed. One potential downside is the increased risk of providing a guarantee - if the property does not rent as well as predicted in the retail market, the manager still is obligated to pay the property owner the agreed upon sum.

Wholesale rentals can be negotiated directly between homeowners and property managers. Such contracts can be good where the parties trust one another, and the numbers are easily agreed upon.[5]

Property owners and property managers can also come to terms through wholesale rental marketplaces. Through such marketplaces property managers compete against one another, bidding up the price offered and ultimately paid to property owners. By creating a market-derived price for properties’ rental weeks, such marketplaces often make it quick and easy for property owners and property managers to come to agreement and sign wholesale rental contracts.[6]