Many people are surprised when they hear that I self manage our out of state short term rental (STR). I often get questions like:
Here are the reasons that we felt that self managing our STR made the most sense for us:
1. You can pocket a significant amount more in cash flow
Hiring someone to manage your property isn’t cheap – typically for STR’s the fees range anywhere from 10% for booking only services to 25-30% for full property management services.That can take a lot away from your cash flow, and make it that much more difficult to find deals that are truly worthwhile.
For us, the additional work of having a STR – high and regular turnover which means more hassle/ potential problems – is only worthwhile if the cash flow is significantly better than a traditional long term rental (LTR). In the case of our Gatlinburg, TN STR, we are able to cash flow close to three times as much as what we would hope to cash flow on a comparable LTR. However, if we did not self manage this property we would not be able to count on making a profit – we would likely only be making enough monthly to keep our capital expenditure and maintenance reserves funded.
Self-managing a property can be the difference between making no profit and receiving a high cash flow.
2. No one cares about your property like you do
Many of you have probably heard this saying before in relation to LTR’s, and it is just as true in the STR side of the investing business.
Vacation rental property management companies have hundreds of listings, and they don’t have any incentive to make yours stand out as an exceptional option. If you spend a few minutes on AirBNB or VRBO you can pretty easily tell which properties are self managed vs. managed by a company simply by looking at the reviews. It’s the little human touches that you can offer as the owner that can make a world of difference. You don’t need to be providing bottles of $40 wine for every booking in a middle class vacation area, but you do want to make sure you are addressing issues promptly and with empathy for your guests!
By self managing your property, you can avoid letting a lot of little issues build into a less than 5 star experience.
3. All you need is a smart phone, a reliable cleaner and some automated systems
While you absolutely want to have that human touch, you can automate a large portion of the day to day, freeing you up to focus on those instances in which you do need to be available for your guests!
For our automated messaging and reservation calendar/price syncing we use the Your Porter app/platform which costs us about $120/year for the basic version. It allows us to create templated messages that will autofill details such as guest name, dates of stay, duration of stay, etc as well as sync our reservations and adjust the price/availability across several platforms from one system.
We have 5 message templates that we utilize which are automatically sent out at certain points. Our guests receive the following automated messages:
This allows us to maintain regular contact with our guests, giving them the opportunity to communicate with us easily if they have an issue or question. If we receive a response, it goes to the app on my iPhone and I am able to easily and quickly respond.
In addition to the automated messaging, I can change pricing and availability across all of the booking platforms we use from one platform. I am also able to set pricing guidelines for large chunks of time, moving the price up and down in percentages from the “base price” and change the minimum number of nights as well. This is super useful for rentals in a seasonal area, as you can automatically have the prices adjust from month to month without having to manually change it all!
As far as finding a reliable cleaner, the best recommendations will come from other investors in the area. Join an online forum for your STR area and ask for recommendations. Don’t be afraid to interview your cleaners – ask for additional references, and answers to any questions you have about how the process will go. Having an excellent cleaner who is familiar with that vacation rental market is crucial to your success!
So are you willing to spend a few hours/week managing your property?
While self-managing is certainly not for everyone, it is a great way to be able to start and expand your real estate investing without having to spend a portion of your cash flow on managing fees. You do have to be willing/able to spend time setting up your systems, and keep a closer eye on the property than you would with a property management company, but that time will pay off in the additional income you will be able to collect!
Be the first to know about new services, resources and opportunities.
Based in the Greater Boston area, Beth helps buyers, sellers and investors across the country achieve their real estate goals. From navigating the purchase and sale process to growing your vacation rental business, Beth provides a one-stop-shop for all of your real estate needs.
Brokered by Board and Park