Nov 25, 2024
Lyndsey Gibson has long enjoyed taking family vacations at Ocean Isle in North Carolina. The hotspot has been a favorite of her husband’s family for more than 50 years.
So when Gibson, a resident of Durham, North Carolina, and her husband had the opportunity to purchase their own property in Ocean Isle, they jumped at the chance — with plans to use it as both a family vacation spot and an income property they could rent out.
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For the last three years, whenever they wanted to rent it out, they used Stellar Beach Realty and Rentals, a property management company that assisted with bookings and gathering deposits. The company is owned by John Kozak.
But everything changed in September, when Gibson realized that Stellar never paid them for any of their August bookings.
She claims the company owes them more than $23,000 for that month. As of October, she still hadn't been paid for August and is now also owed another $5,000 for September rentals.
"This year is going to be tough,” Gibson told ABC 7. “I don't know how we're going to get through the winter months when we don't have bookings.”
Gibson and her husband aren’t the only ones left reeling — other Ocean Isle property owners have come forward claiming Stellar owes them thousands of dollars in rental payments.
Homeowners claim they’re owed thousands
The North Carolina Attorney General’s office confirmed to ABC 7 that their office has received at least 20 complaints from affected homeowners and stated in a letter to Steller customers that the situation "appears to be a criminal matter."
Danielle Boukedes, another Ocean Isle homeowner, claims she's owed more than $31,000 for renters who stayed at her property in August and September. Like Gibson, she says she trusted Kozak to handle bookings and payments.
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“We’re upset, you know. Everyone trusted him and trusted our money was safe, and at the end of the day it wasn't,” Boukedes told reporters, adding that Stellar also collected deposits for future rentals, some as high as $9,000.
Despite repeated attempts to contact Stellar's owner, homeowners say they've yet to receive concrete answers. According to Boukedes, Kozak told her, “I don’t have the money,” and could not explain why the funds were not safeguarded in an escrow account.
ABC 7 reviewed an email sent by Kozak to homeowners in September acknowledging the payment delays and promising that payouts would be made “asap.”
By October, however, another email from Kozak revealed the company was struggling to resolve the issue, writing, "I'm working daily to find a resolution to the impact on you and your property."
Stellar Beach Realty and Rentals is now under investigation by the North Carolina Real Estate Commission (NCREC) and law enforcement. Kozak’s attorney said in a statement that he intends to cooperate with the investigations, but declined further comment.
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How to avoid being scammed by your property management company
If you own a rental property, hiring a property management team can save time and boost bookings if the company uses professional marketing practices.
However, with wide-ranging fees that can be anywhere between 10% and 50% of rental income, it's essential to stay informed and take precautions to protect your investments.
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Start by thoroughly researching any company you're considering working with. Read online reviews and check for past or ongoing legal issues. Verify that the company is licensed by your state's real estate commission, as licensing often ensures stricter accountability.
Review the property management contract carefully and ensure it includes clear terms for payments, financial reporting, and access to booking systems.
Regular financial reports can help you track income and catch discrepancies early. Be cautious of companies that don’t explain how or where your money is being handled.
While professional property management can certainly save time, it’s not the only option.
Self-management tools, such as vacation rental platforms, offer direct access to bookings and payments, giving you more control.
By staying informed and taking proactive steps, you can reduce the risk of financial issues, like those faced by the dozens of Ocean Isle homeowners.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
