Is it insane to manage your own STR?

Short-Term & Vacation Rental Discussions

Is it insane to manage your own STR?

Investor · Spokane, WA · Member since 2023 · 31 posts · 16 votes

Hey friends,

Really struggling with paying 25-30% of our gross to a property manager on our first STR.

I love all the details that go into AirBNB (decor, set-up, marketing copy, customer service), so the only things I can really see needing help with are:

1. 24/7 emergency response person

2. Lawn care

3. Great cleaning people for turnovers who I can trust

Is that worth 30%?

Our STR is in a vacation town 40 min from us - we are very familiar with the area.

High season is all summer, then slows way down.

Thoughts? What am I missing?

TIA!

Kelly

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Luke CarlPro Member

Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes

Yes. I’m insane. I have a bunch of them.

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Konstantin GinzburgPro Member
Member since 2021 · 376 posts · 242 votes
3y
I manage my own STR, however my STR is one unit of a building that I also live in so self-management is much simpler in this case. You have most of the tasks accounted for in your list; the only thing I would likely add is someone to look for and perform maintenance on the property so that small things can be caught and remedied early before they escalate. You can shift some of that responsibility to your cleaning team but keep in mind, if they do not have any maintenance training; they may not be able to catch everything during their cleaning. The other thing that you would need to take responsibility for is marketing and guest interactions if you self-manage; both of those can be done remotely though. You mentioned you are in a vacation town, so I am assuming there will be a fair amount of competition in that market so creating a marketing plan to make your property standout and encourage guests to book with you rather than a competitor will also be something that you will need to do. Once a guest does inquire about your property; it will also be up to you to answer any of their questions and provide a welcoming introduction. I know there are programs that are able to auto-respond but I do not have any personal experience with those so I can't make any comments regarding it. Best of luck on your new STR!!!!
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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
Yes. I’m insane. I have a bunch of them.
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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Even though we have a STR co-host company I wouldn't dream of having someone else manage mine. And we want STRs 15 hours south of us, and a couple 26 hours west of us. :D
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Wilson Vanhook
Rental Property Investor · Oklahoma City · Member since 2021 · 108 posts · 103 votes
3y
Do it! Take the leap! 100% you're capable of managing your own STR. The biggest thing is learning the ropes of what it takes to create a captivating listing, and how to effectively use a dynamic pricing strategy. If you feel you have the time to spend to learn those things properly you can definitely self manage. Otherwise you may want to at least look into getting a cohost. I own a management company and we only charge 10% for cohosting which is much more affordable than what you stated. Idk what other cohosts are charging, probably anywhere from 10-15% for somebody reasonable.

But again, if you spend the time to learn the ropes yourself you can self manage! Just make sure you’re committed to educating yourself.
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
If you are 40 miles away, you should self-manage if you have the time and interest. If it might affect your sanity, simply use some of your savings for therapy.
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Jim MuellerPro Member
Rental Property Investor · Central NY · Member since 2019 · 31 posts · 21 votes
3y
It’s simple but in no way easy, so yes it may be insane. We self manage from 12 hours away. Do your homework and go for it!
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Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
3y
It's not insane at all, but you definitely need to have someone who can help with emergencies, preferably a cleaner and understand it will be quite a bit of work compared to normal rentals and the times you'll need to work aren't ideal or consistent.
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Lory Audate
Realtor · Las Vegas · Member since 2022 · 3 posts · 2 votes
3y
Good question and I can see how that is conflicting. Here is how my husband and I approach outsourcing costs: Will the time you would have to spend doing these items cost you more by taking you away from other revenue generating activities?
Another way to look at it would be how much does your time cost if you were charging someone else for the same services, including gas, resources, systems, time on site?
What may help to make this decision as well would be to see if there is a benefit to outsource these items independently. As a previous project manager I used to get at least 3 quotes to compare costs and pros and cons for each service needed and sometimes a bundle made the most sense, sometimes it didn't. The 3 items you mentioned may cost less if you get independent contractor on an on call basis or rotating schedule. #1 may be a handyman with 24/7 support #2 landscaper with weekly or bi-weekly rates #3 local cleaning company with great reviews / long term references. I hope this helps & best of luck !
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Not insane.
You just have to systems and people to handle things for you, such as cleaners.
1 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
If you do not have a day job, do it.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Hey @Kelly Cochran, so you and I are in the same market and we self manage from 7 hours away. We have been doing it for 5 years going on 6. No issues.
Everything you listed is pretty easy to get going. There are some great cleaners in our area, especially if you are in town. Lawn care is cake, just setup a maintenance schedule for all things including hard systems (furnace and AC).
It is not worth 30%. You are soooo close it will be pretty easy IMHO. You can ask your cleaner to be the 24/7 contact person, but frankly if you have it all setup and maintained, you can do it yourself. We hardly get any calls.
The key is keeping up on the house maintenance. You could visit once a month and do a welfare check on the place because you are so close. We have our furnace and A/C serviced 2x a year. Hot water heater flushed yearly. I redo the decks and outside stairs every 2 years. I just painted all the stairs and railings. Coming over next week to do the deck.
Plus we have the beach we have to keep up on. We are on the open lake in Harrsion between the St. Joe and Coeur d'Alene rivers. They both dump logs on our beach. I have to cut up 10 logs ranging from a 10 foot cut section of Ponderosa to a 90ft Cottonwood.
You can do it for sure. It isn't hard once you get things running. Just because they are a professional management company doesn't mean they are any good.
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John Mausteller
Real Estate Agent · Outer Banks, NC · Member since 2019 · 168 posts · 116 votes
3y
Hey Kelly!
I say YES, manage your own! Mainly because you are only 40 minutes away! Find a good team, but with you being only that far away, if it was a major thing, you could get their rather quickly in the grand scheme of things. I manage all my STRs , some of them locally which is obvioulsy easier, but the other ones are 6.5 hours away but it has worked out great. If there are lots of trades in the area or surrounding area of your STR, you can certainly manage it on your own. Connect with Handymen, Cleaners, etc - I think it is a no brainer, as 30% management fee is pretty outrageous!
1 Reply
Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
It is work. Most new investors under estimate the amount of actual time it takes. But since you like the business and live close it may make sense for you. I’m a big supporter of the professional management side of things. Just make sure you interview a few different managers if you decide to go that route.
1 Reply
Brooklyn McCarty
Investor · Member since 2022 · 1k+ posts · 754 votes
3y
Quote from @Kelly Cochran:

Hey friends,
Really struggling with paying 25-30% of our gross to a property manager on our first STR.
I love all the details that go into AirBNB (decor, set-up, marketing copy, customer service), so the only things I can really see needing help with are:
1. 24/7 emergency response person
2. Lawn care
3. Great cleaning people for turnovers who I can trust
Is that worth 30%?
Our STR is in a vacation town 40 min from us - we are very familiar with the area.
High season is all summer, then slows way down.

Thoughts? What am I missing?
TIA!
Kelly
Totally doable!!

Start with Avery Carls Book; Short Term Rental, Long Term Wealth.

Her book will guide you in most everything!
0 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Everyone is different. If you want to manage your own STR, then do it.
0 Reply
Zane Cress
Realtor · Athens, GA · Member since 2023 · 201 posts · 104 votes
3y
Unless you are operating a large portfolio of STRs then self management is the only way that makes sense to me.
0 Reply
Todd Goedeke
Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
3y
@Kelly Cochran are you looking to be an active investor or passive investor? A passive investor looks to lock in a specific cash on cash (ConC) return with no participation in running the day to day operations of a STVR.
What can you look to achieve as a passive investor? Look to NNN lease locking in 16%+ returns ConC.
As an active investor you have decided to invest not only money but time. You can choose between a full time PM or reducing your expense by hiring a local co-host.A way to limit your time invested is by hiring a co-host for a fixed amount resulting in that amount equal to no more than 5-10% of gross revenue. What amount you pay should be determined by what the co-host does involving each rental and the time involved to complete that work. Retirees make great potential co-hosts. You should be able to hire them for $25-$30/ hour.
Your biggest hurdle as an active investor is developing,marketing, to achieve as close to 100% direct reservations. This allows you to not be dependent on business practices of OTAs, VRBO and Airbnb telling you how to run your business. It also saves you and your vacation clients between 20-30% in costs and fees.
0 Reply
Todd Goedeke
Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
3y
@Zane Cress what about investors with retirement accounts owning STVRs who are not allowed by ITS rules to be active investors, they can’t self manage.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
You'll get mixed results. I work a full-time job. Even though I am highly skilled at managing properties, I still hired my friend to manage my vacation rental just 30 minutes away because I don't want the work. The property pays for itself and produces some income, so I'm happy.
Someone like Luke Carl has many years of experience, multiple properties, and a lot more free time. He's able to find ways to automate processes and reduce his workload so he can manage many rentals with less work than it would take a new investor.
The best advice I can give you is to try it and see how it works. You may find it only takes a few hours a week and isn't that difficult. You may find it runs you ragged.
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Richardd Barran
Flipper/Rehabber · Johnson City, TN · Member since 2020 · 26 posts · 49 votes
3y
Heck no
Unless you’re already a millionaire, 25-30% of your gross is worth a few hours of your time every week, and eventually when your systems get refined, that few hours turns into a few minutes.
Read Avery Carl’s book, watch Robuilt on YouTube and real estate Robinson’s.
If that makes us insane, than color me insane. Normal is boring anyway. That’s why we’re real estate investors
2 Reply
John M.
Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
3y
@Kelly Cochran. I get that you're struggling to pay the high fees but the real question I have is how passive is AirBNB? I don't mind paying the 20% + if it's TRULY PASSIVE.
1 Reply
Kelly Cochran
OP
Investor · Spokane, WA · Member since 2023 · 31 posts · 16 votes
3y
Quote from @Eliott Elias:

If you do not have a day job, do it.

Oh I definitely have a day job, but it's fairly flexible (WFH).
0 Reply
Kelly Cochran
OP
Investor · Spokane, WA · Member since 2023 · 31 posts · 16 votes
3y
Thank you so much, everyone, for your thoughtful replies! I think I'd like to BE an active host, but knowing my work/kid schedule and how much that drive to/from the house will be, I may have to be realistic and hire a PM for the summer...
0 Reply
Kelly Cochran
OP
Investor · Spokane, WA · Member since 2023 · 31 posts · 16 votes
3y
Quote from @Richardd Barran:

Heck no
Unless you’re already a millionaire, 25-30% of your gross is worth a few hours of your time every week, and eventually when your systems get refined, that few hours turns into a few minutes.
Read Avery Carl’s book, watch Robuilt on YouTube and real estate Robinson’s.
If that makes us insane, than color me insane. Normal is boring anyway. That’s why we’re real estate investors

Awesome, will check out all your recs!
0 Reply
Joy Allen
Member since 2020 · 31 posts · 13 votes
3y
@Kelly Cochran We manage our place in Virginia from California. With Google and Yelp and other places for reviews. It's very easy to get folks for repairs etc.
The biggest deal is having a good cleaning team. They can alert you to win. Something needs to be repaired. We found our team through a referral, but I'm sure turnover B&B would be a great resource. You can totally do this, especially if you're only 40 minutes away!
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