Does anyone use a management company to run their STR?

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Does anyone use a management company to run their STR?

Alex K.
DE · Member since 2009 · 35 posts · 9 votes

The area's I am interested in aren't anywhere near me - so just wondering if it's feasible and if anyone has experience outsourcing the management of a STR? Pro's, Cons, Thoughts?

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Kenneth GarrettPro Member
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
4y

@Alex K.

You don't need a management company. They will eat into your profit. I self manage 1000 miles away. You need a good cleaning company and a handyman. I use Schlage encode to issue door lock codes and have a ring camera. Takes very little time at all to manage a STR. Let the VRBO and Airbnb platforms do the rest. You can manage it from your phone.

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    4y

    Not the people that hang here. People that use management on short term don’t want to do anything and likely aren’t making money 

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  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    4y

    @Alex K.

    You don't need a management company. They will eat into your profit. I self manage 1000 miles away. You need a good cleaning company and a handyman. I use Schlage encode to issue door lock codes and have a ring camera. Takes very little time at all to manage a STR. Let the VRBO and Airbnb platforms do the rest. You can manage it from your phone.

    5Reply
  • Dave StokleyBusiness Member
    Property Manager · Cleveland, OH · Member since 2015 · 699 posts · 799 votes
    4y
    Quote from @Luke Carl:

    Not the people that hang here. People that use management on short term don’t want to do anything and likely aren’t making money 


    Come on Luke you know that’s bs. My company manages tons of units for investors and every single one of them is making money.  

    5Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    4y
    Quote from @Dave Stokley:
    Quote from @Luke Carl:

    Not the people that hang here. People that use management on short term don’t want to do anything and likely aren’t making money 


    Come on Luke you know that’s bs. My company manages tons of units for investors and every single one of them is making money.  

    He’s probably not wrong for people who have bought in the past year at historical prices. There’s only so many reliable handymen and cleaners in a certain area though. If you have established people or have a network of people on the ground then self management is the way to go. 
    1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y
    Quote from @Dave Stokley:
    Quote from @Luke Carl:

    Not the people that hang here. People that use management on short term don’t want to do anything and likely aren’t making money 


    Come on Luke you know that’s bs. My company manages tons of units for investors and every single one of them is making money.  


     What he really means is that an owner can pocket the PM fee and make a good deal more money from their investment. Most people on here do exactly that.

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    4y

    Hey @Alex K., most of us self manage. I know I wouldn't make a profit if I used a PM in my area. 

    0Reply
  • Joshua MessingerBusiness Member
    Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
    4y

    Hey @Alex K.! 

    My team's management company manages over 200 properties along the east coast, and just launched our operations in AZ. It's 100% feasible to do it yourself if you know what you're doing and know exactly what processes you need in place to make your operation run smoothly. Otherwise, if you don't have this experience yet I would recommend using a management company that can take care of everything for you. 

    All in all, the only thing that matters is what your objectives are and what you want to get out of owning your own STR. This will easily guide you in the direction you want to move. (For ex: Make passive income and have another investment vehicle, make a ton of cashflow and learn how to operate a business, etc)

    Hope this helps and if you have any more questions please don't hesitate to reach out! 

    All the best,

    Josh 

    [email protected]484-986-5012
    2Reply
  • Michael Bradshaw
    Specialist · Vancouver, WA · Member since 2019 · 7 posts · 2 votes
    4y

    Hi Alex,

    I have a STR unit in Palm Springs and I use a property manager. The city has a fairly strict STR policy, such as meeting guests within 24 hours of arrival and a designated contact that can respond to neighbor/city complaints within 24 hours. While you don't have to have a management company, I do not live anywhere close to Palm Springs which then requires me to set up a local property manager. There are some differences in property management companies from full service to ala carte options. The full service option typically charges 15-25% of rental income, possibly a monthly fee and provides all services needed, bookings, guest check ins, guest complaints, maintenance, housekeeping, inspections and maybe even payment of STR taxes after guests leave.

    I am more hands on in my rental and have smart devices that make my life a little easier, smart locks, smart exterior lighting, smart thermostat, loud noise indicators and smart smoke detector.  I also utilize automated messaging to help with guest bookings.  I have opted to partner with a property management company that provides ala carte services to maximize my income and management style.  They provide guest greets upon arrival, interior inspections weekly and will perform grocery shopping for me should I run out of anything.  I do not use the other services they provide as the costs are too much for me.  I have found my own cleaner and a repairman if needed- all extra work for me which took some time and is an ongoing process.  This requires me to take more of a managerial role but it also gives me more control over who I rent to, for example I am less enthused about renting to event goers like Stage Coach or Coachella.  A property management company I think will prioritize rental income as their priority.

    While my approach is not for everyone it works for me.  It really depends on your appetite to get involved or if you want to minimize your guest involvement.  Less involvement means higher costs, which you have to be comfortable with.  Hope this helps.

    2Reply
  • Lori Pyne
    Member since 2022 · 3 posts · 3 votes
    4y

    We use a property management company - Love Yosemite! Vacation Rentals - for our STVRs in Yosemite. We know how lucky we are to have them as our partners in business. During the various fires and snow storms, when the Park, or various roads leading to the Park, are closed - our property managers have professionally handled the rescheduling of all of the guests whose reservations were affected. Having a management company may not work for everyone, but it works for us.

    0Reply
  • John B ClarkPro Member
    Waltham, MA · Member since 2021 · 38 posts · 26 votes
    4y

    I use a management company and am still netting almost $50K. Could it be more? Yes, of course it could, but then it wouldn't be passive income for me. I get to be 100% hands off and still make almost $50K net, after paying them and all expenses, including mortgage, maintenance, CAPEX, etc. Reach out to me directly and I'll tell you who I use and the markets they are in…they are a smaller company, so they're only in a couple markets.

    1Reply
  • Ruben Kanya
    Short Term Rental: Realtor, Investor, Manager · Atlanta, GA · Member since 2017 · 138 posts · 85 votes
    4y

    I find you're either option #1 paying your dues upfront (build a team and implement systems to self manage) or option #2 pay a pm company 25% of revenue which can be the amount used to fund another deal, especially depending on how long you have an STR, it can compound a lot overtime.

    OPTION #1 - SELF MANAGING consists of taking the time to build a lean team, which isn't that challenging to do but requires you to put the right people together, again doesn't have to take long, you can assemble these pieces in less than a month. We did it because we had to. We are in New York and self manage 4 STRs in Georgia.

    Setup:

    -Cleaning Team: ask your local realtor for recommendation; ask them to post in their private realtor groups and they will get tons of recommendations they can share with you. (i speak from experience I'm a licensed realtor and that's we built our team). You will 1/3 times find a cleaner who has experience running airbnbs....there's saying that goes you hire people to tell you what to do ...not the other way around...they'll cover the details around what you need to help them help you become successful. Just like anything else, not all cleaners are created equal


    - Technology:     Ring Doorbells (ring), Smartlocks (august), security (ADT), Smart home technology, control heat/ac remotely (ADT and or nest), Dynamic Pricing Tools (pricelabs), PMS - property management software (Guesty) to automate guest messes, share dynamic cleaning calendar with cleaners, sends reminder notifications etc.

    -Handyman:  we have electricians/handyman. Ask your realtors and or post in bigger pockets locally for recommendations. Including landscapers

    That's the dream team. We've been able to build a lean dream team and all of our properties cashflow significantly from a distance. Rest assured it's not a matter of IF things go wrong it's a matter of WHEN they do. And when they do...never ask HOW this problem can be fixed but always ask WHO can fix this before you pick up the phone...that question will force you to be resourceful and to build systems and that is what will seem like a passive business when truly you've taken the time to invest in systems upfront. Feel free to reach out if I can be of anymore help.

    4Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    4y
    Quote from @Ruben Kanya:

    I find you're either option #1 paying your dues upfront (build a team and implement systems to self manage) or option #2 pay a pm company 25% of revenue which can be the amount used to fund another deal, especially depending on how long you have an STR, it can compound a lot overtime.

    OPTION #1 - SELF MANAGING consists of taking the time to build a lean team, which isn't that challenging to do but requires you to put the right people together, again doesn't have to take long, you can assemble these pieces in less than a month. We did it because we had to. We are in New York and self manage 4 STRs in Georgia.

    Setup:

    -Cleaning Team: ask your local realtor for recommendation; ask them to post in their private realtor groups and they will get tons of recommendations they can share with you. (i speak from experience I'm a licensed realtor and that's we built our team). You will 1/3 times find a cleaner who has experience running airbnbs....there's saying that goes you hire people to tell you what to do ...not the other way around...they'll cover the details around what you need to help them help you become successful. Just like anything else, not all cleaners are created equal


    - Technology:     Ring Doorbells (ring), Smartlocks (august), security (ADT), Smart home technology, control heat/ac remotely (ADT and or nest), Dynamic Pricing Tools (pricelabs), PMS - property management software (Guesty) to automate guest messes, share dynamic cleaning calendar with cleaners, sends reminder notifications etc.

    -Handyman:  we have electricians/handyman. Ask your realtors and or post in bigger pockets locally for recommendations. Including landscapers

    That's the dream team. We've been able to build a lean dream team and all of our properties cashflow significantly from a distance. Rest assured it's not a matter of IF things go wrong it's a matter of WHEN they do. And when they do...never ask HOW this problem can be fixed but always ask WHO can fix this before you pick up the phone...that question will force you to be resourceful and to build systems and that is what will seem like a passive business when truly you've taken the time to invest in systems upfront. Feel free to reach out if I can be of anymore help.


     All very good points. One question I have is, do you get a lot of turnover with your cleaning crew/handymen, and also how much have your costs of your team gone up over the last two years due to wage inflation?

    0Reply
  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    I don’t self manage and I still make money. Could I make more if I self managed? Maybe. My time is better spent elsewhere. I don’t want to learn the platforms, I don’t want to be on call on a full time basis, I don’t know what goes into marketing to result in near 100% occupancy, I don’t want to interview cleaners when the one you have bails on you or no longer performs. In short, I want to invest and have it generate returns not create a full time management job for myself 

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    4y

    I use a PM but recently fired one and so far i am not thrilled with the replacement I chose.  they have not lived up to their commitments or even close.

    As for making money using a PM, my duplex STR has over a 4% rent ratio. I can pay the PM and still make money LOL.

    STR management takes more time than LTR management and LTR management time adds up. PMs are not getting wealthy managing STRs. It takes time and is a job. If you choose to self manage, you are taking on that job. You need to access for yourself if that is the best value of your time. I know I can make much more with my time than the PM fees. Even one good investment found could equate to more than a year PM fees.

    I do not resent paying PM fees if they are doing a good job, but my last PM did terrible and so far my new PM is doing terrible.  I have had many fine PMs in the past (we have had STRs 23 years), but the last year has been nothing but poor PM experience but the new PM is only 2 months (so I hold some hope for improvement).  

    0Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    4y

    the most surprising thing from this thread is seeing that a decent amount of people that are on here are using a PM. I thought everyone on BP just did it all on their own using phone apps. 

    0Reply
  • Alex K.
    OP
    DE · Member since 2009 · 35 posts · 9 votes
    4y

    Thanks everyone for the feedback.  It's great to hear all the different experiences.  

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    I live 30 minutes from my STR and manage 400 rentals. I could make more money managing it myself and I have the skill set, but I prefer my freedom over more money.

    I net 3x what I would if the property were a long-term rental.

    The DIY Landlord Book4.7248 Reviews
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  • Gerald Pitts
    Lender · Asheville NC · Member since 2016 · 469 posts · 317 votes
    4y

    I would look into a cohost or virtual assistant. It's the same job essentially. But you can train them to use modern tech and mindset to optimize your listing, monitor pricing software, answer calls. Maybe handle FB ads or social media. You’ll be able to make a lot more money than if you just hire the company who has been around 50 years. They will have lots of experience, but won’t make you near the amount of money that someone who understands pricing software, listing optimization, marketing will. Good luck!

    1Reply
  • Lucie Tighe
    Property Manager · Tampa, FL · Member since 2022 · 147 posts · 66 votes
    4y

    @Alex K. Having a reliable property manager will save you a lot headaches. My take is if you love running your STR and you're passionate about it, it's great. If not, delegate it to someone else and spend your time doing what you love. Life's too short:)

    1Reply
  • Andrew Street
    Member since 2019 · 1k+ posts · 292 votes
    4y

    @Alex K. Airbnb Manager can not only solve the issues that guests may have, but also maximize the revenue you could be making from your property. For instance, because I work with multiple different properties, I have a ton of reps and experience that I could use towards helping your property. Definitely happy to connect and provide further insights!

    0Reply
  • Andrew C.
    Investor · Forest Hills, NY · Member since 2014 · 101 posts · 52 votes
    4y

    I always find it odd when people say that STRs make 3-4xs more than traditional rentals but also say that if you're paying a property manager 20-25%, then you're not making money.  I don't see the posters on the landlording forums tell people to self-manage and not hire property managers.  Obviously, if you are able self-manage then you can make a lot more.  Also, if the management companies are charging 30% or higher then at that point it might not make sense.  I have a good property manager and he charges a good rate and does good work.  I briefly tried to self manage and it was stressful.  Maybe if you have a very good and reliable cleaner and handyman it might work but finding good help is very difficult in itself...more so if you live far away. 

    0Reply
  • Robin Searle
    Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
    4y

    @Luke Carl SO not true! I am too busy with my residential real estate business to manage my three local Colorado Springs STRs. I’ve used Hoste for 3 years and am definitely making very good money. I view outsourcing handling guest relations and cleaners and maintenance as investment as it allows me to focus on my full time career! I do manage my long term rental as it takes virtually no time.

    1Reply
  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    what @Robin Searle said! I think it comes down to the quality of your manager and the property itself. The third component is micro managing your manager and/or trying to be too involved in the initial setup unless you are super super good at it. if your manager says we need to replace furniture, repaint the walls, add artwork, retake professional pictures, do something else, let them do it. if you don't trust them to do what they do best don't hire them, otherwise let them do it. the return on investment follows. the reviews will accumulate and will help. the superhost status will help. whatever else your professional manager does will help.

    I've been managing commercial and residential for 20+ years. Never touched STR and don't want to learn. And I never self manage. Attorneys say that the worst lawyer you can hire to represent yourself in court is yourself. Same goes for property managers.

    1Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    @Alex K. Some companies like Fortune Cribs seem like great options for investors looking to take advantage of STR potential ROI without wanting to take on all of the duties.

    [email protected]818-606-8823
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  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    4y
    Quote from @John Underwood:
    Quote from @Dave Stokley:
    Quote from @Luke Carl:

    Not the people that hang here. People that use management on short term don’t want to do anything and likely aren’t making money 


    Come on Luke you know that’s bs. My company manages tons of units for investors and every single one of them is making money.  


     What he really means is that an owner can pocket the PM fee and make a good deal more money from their investment. Most people on here do exactly that.


     I do everything myself except using a roto rooter.  I don't want someone elses ship on my hands.  

    Electric, plumbing, roofing, carpentry, you name it.  I can do it.

    1Reply
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