Do I need a management company?

Short-Term & Vacation Rental Discussions

Do I need a management company?

Homeowner · DMV · Member since 2023 · 28 posts · 25 votes

My goal is to purchase my first STR this year or early next. The location I have my eye on is a 3 hr drive from my home in a vacation destination. My question is: How do you know whether to hire a management company or whether to just gather your own vendors (cleaners, handymen, etc) I'm confident in my ability to assemble my own team but doing it all remotely scares me a bit. Yes, hiring a company to do it all for me will take a big bite out of my profits but could it save me from huge headaches since I don't live there and not very familiar with the area? Any insight from your experience would be very helpful. Thank you!

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Collin HaysBusiness Member

Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes

DIY vacation rentals are great if you have TIE. Time, interest, and energy. If any of the three are missing, you need a manager to realize the property’s potential.

It’s not unlike any other DIY endeavor: You can save a bundle doing your own nails, coloring your own hair, mowing your lawn, changing your car oil, and ironing all of your apparel.

Most of our clients would rather watch paint dry than manage a rental. Doctors, lawyers, retirees, etc. Several of our homeowners haven’t even seen their rental in person, a few have never even been to Tennessee - ever!

Only you know if you have TIE. Well, on the other hand, you might pose the question to your spouse - to get a more truthful answer. 🤣

[email protected]806-672-7102

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Trent Reeve
Atlanta · Member since 2022 · 707 posts · 635 votes
3y
all depends on your appetite. we bought our first STR in Panama City and i live in Atlanta. hasnt been an issue so far remotely managing
1 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Chelsea Price
I would strongly recommend a management company. While on paper it costs you $, in grand scheme of things the time and cost of not having one will wear on you. It’s also a better use of your time to focus on growing your business not managing a rental
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Chelsea Price
OP
Homeowner · DMV · Member since 2023 · 28 posts · 25 votes
3y
Quote from @Trent Reeve:

all depends on your appetite. we bought our first STR in Panama City and i live in Atlanta. hasnt been an issue so far remotely managing
May I ask who is on your team to help you besides cleaners? And do you use any app or software to self manage everyone?
0 Reply
Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
You're teaching yourself another job. Self managing STR isn't passive real estate investing. It's a hospitality business. It can be done of course, particularly if you're only 3 hours away. Once I hit 5 cabins that I owned I created a property management company. So if you plan to scale get a PM.
5 Reply
Lisa Graesser
Rental Property Investor · The Villages, FL · Member since 2017 · 341 posts · 397 votes
3y
You can do it remotely, you just need the time to respond to guests at any time regarding questions. You need a reliable cleaner, you need a handyman and numbers for those you can contact for issues like ac not working, appliances not working. If you follow FB groups in the area, you can get great recommendations from others on who you can call. If you are willing and able to be available for any issues, it will be well worth your time, if you have the time available, to do it yourself
3 Reply
Jen LeViseur
Member since 2020 · 1 post · 0 votes
3y
0 Reply
Jen LeViseur
Investor · Bentonville, AR · Member since 2023 · 19 posts · 12 votes
3y
Hey @Chelsea Price, it totally depends on your goals and if you want to deal with self-management. We have self-managed for years and our furthest units are 14 hours from where we live.
1 Reply
Trent Reeve
Atlanta · Member since 2022 · 707 posts · 635 votes
3y
Quote from @Chelsea Price:

Quote from @Trent Reeve:

all depends on your appetite. we bought our first STR in Panama City and i live in Atlanta. hasnt been an issue so far remotely managing
May I ask who is on your team to help you besides cleaners? And do you use any app or software to self manage everyone?

I have cleaners and maintenance people. I use OwnerRez to manage bookings and emails and Waveapps to track finances.
1 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
DIY vacation rentals are great if you have TIE. Time, interest, and energy. If any of the three are missing, you need a manager to realize the property’s potential.
It’s not unlike any other DIY endeavor: You can save a bundle doing your own nails, coloring your own hair, mowing your lawn, changing your car oil, and ironing all of your apparel.

Most of our clients would rather watch paint dry than manage a rental. Doctors, lawyers, retirees, etc. Several of our homeowners haven’t even seen their rental in person, a few have never even been to Tennessee - ever!

Only you know if you have TIE. Well, on the other hand, you might pose the question to your spouse - to get a more truthful answer. 🤣
[email protected]806-672-7102
SMOKY MOUNTAIN FALLS INC.51 Review
Website View Page
6 Reply
Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
Read Avery’s book :)
Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
4 Reply
Alex ScattareggiaPro Member
Investor · Cabo San Lucas, Mexico · Member since 2023 · 150 posts · 139 votes
3y
I would recommend at least giving self management a go on your own in the beginning. The information and experience you get can be invaluable, provided you have the time for it.
You can pretty easily assign a $ value to your time in STR within the first few months if you track how much time you are spending on the business. Then weigh that against the cost of a PM over that same period and figure out what makes the most sense. Cheers, good luck!
3 Reply
Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
3y
@Chelsea Price Depends on your area. My area is a 4 season vacation area but PM companies are virtually non existent and it’s equally as hard to find handymen and reliable cleaners let alone electricians or a plumber if you need a bigger repair in short order.
Apparently people are managing to figure this out because about 85% of long term housing has become STR in the past 5 years.
1 Reply
Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
This is a personal question. Neither answer is wrong. There are already a lot of great answers above, I just want to add some lesser mentioned things to consider:
- Self Managing pros: Since your place is in a vacation destination there should be reputable cleaning companies, handymen, etc to help you manage and finding them should not be hard. You make all decisions and keep all funds. I know of people managing across country and even internationally, 3 hours is not that bad, you can check in monthly (if time allows).
- Self Managing Cons: Limited reach/experience already. You are running a 24 hour business. I am not sure if you have familial or employment engagements already but Murphy's Law states your phone will ring with "emergencies" at the worst possible times.
- Property Management Pros: A good PM can get you on a lot more booking channels. We are on 16 currently including Marriot Homes and Villas which has been a great plus for a lot of our clients. The extra exposure can make up for a lot of the fee.
- Property Management Cons: If you are the type of person who wants control, this may not be good. Also a lot of PM are not great, you will really want to be careful who you choose. I recommend going with a mid size (50-150 units). Small enough to care/big enough to have reach and have employees (not a 1/2 person show). Also be clear with PM who keeps what fees etc.
[email protected]813-563-0877
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3 Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @Lisa Graesser:

You can do it remotely, you just need the time to respond to guests at any time regarding questions. You need a reliable cleaner, you need a handyman and numbers for those you can contact for issues like ac not working, appliances not working. If you follow FB groups in the area, you can get great recommendations from others on who you can call. If you are willing and able to be available for any issues, it will be well worth your time, if you have the time available, to do it yourself

I 100% agree with Lisa.
It sounds like your the kinda person that can handle this.
1 Reply
Chelsea Price
OP
Homeowner · DMV · Member since 2023 · 28 posts · 25 votes
3y
Quote from @Andrew Steffens:

This is a personal question. Neither answer is wrong. There are already a lot of great answers above, I just want to add some lesser mentioned things to consider:
- Self Managing pros: Since your place is in a vacation destination there should be reputable cleaning companies, handymen, etc to help you manage and finding them should not be hard. You make all decisions and keep all funds. I know of people managing across country and even internationally, 3 hours is not that bad, you can check in monthly (if time allows).
- Self Managing Cons: Limited reach/experience already. You are running a 24 hour business. I am not sure if you have familial or employment engagements already but Murphy's Law states your phone will ring with "emergencies" at the worst possible times.
- Property Management Pros: A good PM can get you on a lot more booking channels. We are on 16 currently including Marriot Homes and Villas which has been a great plus for a lot of our clients. The extra exposure can make up for a lot of the fee.
- Property Management Cons: If you are the type of person who wants control, this may not be good. Also a lot of PM are not great, you will really want to be careful who you choose. I recommend going with a mid size (50-150 units). Small enough to care/big enough to have reach and have employees (not a 1/2 person show). Also be clear with PM who keeps what fees etc.

I have read and reread hundreds of past posts on multiple platforms concerning my exact question and by far your answer has been the most helpful! Thank you SO MUCH for outlining the pros and cons in this manner. You rock! 😀
1 Reply
Chelsea Price
OP
Homeowner · DMV · Member since 2023 · 28 posts · 25 votes
3y
Quote from @Collin Hays:

DIY vacation rentals are great if you have TIE. Time, interest, and energy. If any of the three are missing, you need a manager to realize the property’s potential.
It’s not unlike any other DIY endeavor: You can save a bundle doing your own nails, coloring your own hair, mowing your lawn, changing your car oil, and ironing all of your apparel.

Most of our clients would rather watch paint dry than manage a rental. Doctors, lawyers, retirees, etc. Several of our homeowners haven’t even seen their rental in person, a few have never even been to Tennessee - ever!

Only you know if you have TIE. Well, on the other hand, you might pose the question to your spouse - to get a more truthful answer. 🤣

Ha! Love this reply! You’ve given me lots to consider.
0 Reply
Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Would highly suggest you figure out your goals and then plan accordingly. Sometimes just figuring out goals, gives us the answer and assurance we need!
[email protected]330-557-3021
1 Reply
Yiwei Cheng
Investor · Cincinnati, OH · Member since 2023 · 139 posts · 81 votes
3y
Quote from @Andrew Steffens:

This is a personal question. Neither answer is wrong. There are already a lot of great answers above, I just want to add some lesser mentioned things to consider:
- Self Managing pros: Since your place is in a vacation destination there should be reputable cleaning companies, handymen, etc to help you manage and finding them should not be hard. You make all decisions and keep all funds. I know of people managing across country and even internationally, 3 hours is not that bad, you can check in monthly (if time allows).
- Self Managing Cons: Limited reach/experience already. You are running a 24 hour business. I am not sure if you have familial or employment engagements already but Murphy's Law states your phone will ring with "emergencies" at the worst possible times.
- Property Management Pros: A good PM can get you on a lot more booking channels. We are on 16 currently including Marriot Homes and Villas which has been a great plus for a lot of our clients. The extra exposure can make up for a lot of the fee.
- Property Management Cons: If you are the type of person who wants control, this may not be good. Also a lot of PM are not great, you will really want to be careful who you choose. I recommend going with a mid size (50-150 units). Small enough to care/big enough to have reach and have employees (not a 1/2 person show). Also be clear with PM who keeps what fees etc.

I agree with Andrew that it depends on your personal goals and preferences. If you want passive income or have a full time job that you don't have time to think about this, then it's best to have an experience property manager with great guest reviews to manage for you. If you want to learn how to do it yourself, then you should do it yourself. Just know that there will be a learning curve.
2 Reply
January Johnson
Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes
3y
Quote from @Chelsea Price:

My goal is to purchase my first STR this year or early next. The location I have my eye on is a 3 hr drive from my home in a vacation destination. My question is: How do you know whether to hire a management company or whether to just gather your own vendors (cleaners, handymen, etc) I'm confident in my ability to assemble my own team but doing it all remotely scares me a bit. Yes, hiring a company to do it all for me will take a big bite out of my profits but could it save me from huge headaches since I don't live there and not very familiar with the area? Any insight from your experience would be very helpful. Thank you!

I'd like to go on record as saying self-managing remotely is not that difficult. What CAN make it overwhelming is trying to add a bunch of technology on top of learning HOW to self-manage. You have plenty of time to learn property management software, dynamic pricing tools, etc. - save that for when you have multiple properties (if you still want to have that technological help), and even then, you can go slowly.

When I started out 9 years ago, I ONLY listed my property on Airbnb (and still do). I ONLY used that platform (which continues to be upgraded to add helpful features) to manage pricing and guest communications, and you really CAN do fine with just the OTA (online travel agency) tools.

Now that there is so much tech, new buyers get analysis paralysis and have fear about managing it all. I'm here to tell you, just do the next thing and the next thing and the next thing, and you will be fine.

Happy to answer more specific questions as well, but the bottom line is: Manage it yourself and keep the 25% fee in YOUR pocket. If you decide self-managing is not for you, at least you will know what a PM SHOULD be doing if you've done it all yourself first.
GOOD LUCK TO YOU!
5 Reply
Chelsea Price
OP
Homeowner · DMV · Member since 2023 · 28 posts · 25 votes
3y
Quote from @January Johnson:

Quote from @Chelsea Price:

My goal is to purchase my first STR this year or early next. The location I have my eye on is a 3 hr drive from my home in a vacation destination. My question is: How do you know whether to hire a management company or whether to just gather your own vendors (cleaners, handymen, etc) I'm confident in my ability to assemble my own team but doing it all remotely scares me a bit. Yes, hiring a company to do it all for me will take a big bite out of my profits but could it save me from huge headaches since I don't live there and not very familiar with the area? Any insight from your experience would be very helpful. Thank you!

I'd like to go on record as saying self-managing remotely is not that difficult. What CAN make it overwhelming is trying to add a bunch of technology on top of learning HOW to self-manage. You have plenty of time to learn property management software, dynamic pricing tools, etc. - save that for when you have multiple properties (if you still want to have that technological help), and even then, you can go slowly.

When I started out 9 years ago, I ONLY listed my property on Airbnb (and still do). I ONLY used that platform (which continues to be upgraded to add helpful features) to manage pricing and guest communications, and you really CAN do fine with just the OTA (online travel agency) tools.

Now that there is so much tech, new buyers get analysis paralysis and have fear about managing it all. I'm here to tell you, just do the next thing and the next thing and the next thing, and you will be fine.

Happy to answer more specific questions as well, but the bottom line is: Manage it yourself and keep the 25% fee in YOUR pocket. If you decide self-managing is not for you, at least you will know what a PM SHOULD be doing if you've done it all yourself first.
GOOD LUCK TO YOU!

Awesome reply, thank you so much. Yeah, I think I’m overthinking it too much. Lol
0 Reply
Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
3y
@Chelsea Price- thanks ...1) if you will need to use a loan to buy the STR - make sure to get formally pre approved 1-2 months before you begin looking for proeprties 2) interview several PM firms so you can become familair with the costs and the companies 3) try self managing for 3-6 months and if all goes well - great ...whereas if things are challenging - then fall back on the notes you took when you intially talked with the PM firms and hire one ...good luck
2 Reply
Brian Barch
Member since 2022 · 272 posts · 253 votes
3y
A highly personal question.
I don't think distance from property needs to weigh too heavily in your answer. This is really about preference. Also know that there are a lot of modern PM options that are more in the 10-15% fee range (as opposed to 30%). I'm talking about places like awning.com, key bee, etc.
I'm fully capable of managing myself. however I really like having a buffer between me and all the guests. The discount asks, the back and forth on checkin times, etc. I had much more peace in busy season and holidays just not having to worry about that. That's worth something to me personally.
I totally get that someone may hear that and say it's absurd to give away 15%, but my W2 job is still my main focus, and having a PM makes it feasible for me to keep my focus where it needs to be, and allows me to scale easier should I want to. It keeps the business fun for me, and not tedius. YMMV. I don't think you NEED to do one or the other. It's personal preference.
1 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
We self manage from 7 hours away. If we didn't we would lose money every month.
PMs in our area want 40% for full service.
3 Reply
Tyler Fontaine
Property Manager · Member since 2022 · 196 posts · 125 votes
3y
It's going to depend on your strategy and how much you really want to be involved. I will say that if you do go with a PM then make sure they are local and actually do STR. They should be able to speak to their experience with this and give you insight as to what to expect.
Not all PM's are the same. Not all PM's specialize in every asset class or investment strategy. Who ever you do bring on (if you do) you should really consider as a business partner. They will be directly affecting your ability to succeed with this.
When looking for a PM you want to make sure they share a similar investment philosophy to your own.
1 Reply
Gersh White
Investor · College Point, NY · Member since 2016 · 14 posts · 6 votes
3y
There are benefits for both hiring a management company and doing it on your own. I have experience with both. Online rental management software companies work well when you have your vendors in place and the property is up to code and in satisfactory rental condition. Management companies however have there own vendors in place and they can be on monthly payment plans charged to your account eating away at your rent. You can also expect lease fees, accounting fees and attorney fees to be added into the mix. Since you are only 3 hours away and not out of state you may be able to handle doing it on your own. I recommend an Avail.com account for landlords. They do have good reviews and background checking software for tenant screening. Good Luck.
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