I started a short term rental property management company

I started a short term rental property management company

Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes

As some of you guys know, I've been doing deals out here in Scottsdale for the last ~13 years. I've done a few dozen flips, a couple spec builds, bought and sold 3 short term rentals, bought and sold 2 long term rentals, and bought and sold a few commercial deals.

I love what I do but the lately I've been craving adding something else to my plate that is more service based (but still related to real estate). Building homes is fulfilling and lucrative but I often feel like my days are spent just chasing down contractors and materials, and pointing out everything that is wrong with work that has been completed.

Over the last ~6 months I thought long and hard about all my options. Do I start a landscaping company? Buy a pool route? Start an HVAC company? An interior design business? Become a broker? The list went on and on...

Well I landed on short term rental property management, and I'm stoked to report that since the start of the year I have:

1. Established the LLC, EIN, business checking, business insurance, accounting, etc (all the boring stuff)

 2. Got educated on all the latest softwares, management systems, and automation programs (dynamic pricing, automating cleaning, automating messaging, etc).

 3. Organized my team (cleaners, handymen, pool maintenance, landscapers, etc)

And after all of that, I have officially onboarded my first client, and just hosted my first guest! (who left a 5 star review, wahoo!)

No doubt the Scottsdale market is very saturated with short term rentals, but it is obvious to me that the underperforming properties are homes that are not designed properly, not photographed properly, not optimized properly, and not priced properly.

I'm also fully aware of the mountain of headaches and heartaches that will come with running a business like this.. but I'm here for the challenge.

Shout out to BP because a big part of what motivated me to take this journey and where I got a lot of the education needed to do this is via a weekly mastermind that I'm a part of that I found through a post in this community a few years back.

Anyways, not sure who cares or if anybody out there has any thoughts, questions, comments etc. But I'm very stoked about this new chapter in life and wanted to come back to share my story! Hopefully it'll motivate somebody else who has been on the fence about starting a new business or doing their next deal.

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Member since 2024 · 13 posts · 8 votes
2y

Scott congratulations, learning from others, and in this industry many are happy to help, is certainly the best way forward. Just remember email and phone data is the best to help you build an independent direct booking presence. The earlier you start collecting this data the better. I’ve been using Emailcollect and get email addresses from everyone that stays in my properties.

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  • Travis BohlingBusiness Member
    Property Manager · Gilbert, AZ · Member since 2011 · 65 posts · 78 votes
    2y

    Congratulations! I look forward to the updates on this adventure.

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @Travis Bohling:

    Congratulations! I look forward to the updates on this adventure.

    Thanks Travis! If there's interest I will keep updates coming. I'm sure there will be plenty of stories to tell ha.

  • Member since 2023 · 23 posts · 9 votes
    2y

    Congratulations  Scott. This is so inspiring 

  • Flipper/Rehabber · Phoenix Arizona · Member since 2020 · 1k+ posts · 686 votes
    2y

    Scott, would love to share some ideas with you. 

  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    2y

    Gratz @Scott E.. I hope it all goes well!

  • Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes
    2y

    Congrats dude! I am a full time cohost and am loving it. Lots of challenges but it's all worth it. You'll meet a lot of great people along the way.

  • Member since 2024 · 13 posts · 8 votes
    2y

    Scott congratulations, learning from others, and in this industry many are happy to help, is certainly the best way forward. Just remember email and phone data is the best to help you build an independent direct booking presence. The earlier you start collecting this data the better. I’ve been using Emailcollect and get email addresses from everyone that stays in my properties.

  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    2y

    So excited for you! Best of luck in your new endeavor!

  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    Congrats Scott! Keep us posted!

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @Mercy Odey:

    Congratulations  Scott. This is so inspiring 


     Thank you Mercy! That's exactly why I shared, glad you enjoyed the post.

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @David Avery:

    Scott, would love to share some ideas with you. 


     Awesome David would love to hear them! I'll send you a message.

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @Michael Baum:

    Gratz @Scott E.. I hope it all goes well!


     Thanks Michael I appreciate that!

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @Jeremy Jareckyj:

    Congrats dude! I am a full time cohost and am loving it. Lots of challenges but it's all worth it. You'll meet a lot of great people along the way.


     That encouragement means a lot man!

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    2y
    Quote from @Account Closed:

    Scott congratulations, learning from others, and in this industry many are happy to help, is certainly the best way forward. Just remember email and phone data is the best to help you build an independent direct booking presence. The earlier you start collecting this data the better. I’ve been using Emailcollect and get email addresses from everyone that stays in my properties.


     I will keep the list building in mind... currently not collecting emails yet.

  • Member since 2024 · 13 posts · 8 votes
    2y

    Hi Scott,

    Get EMAILCOLLECT . Cost you $60 per yr. My wife and I use it in our 14 apartments and build our data base like crazy. Moved us from 10% to 20% in 3mths direct booking. Of course you need to market to your past guests, we do it ourselves as all our apartments are in the CBD so people return for birthdays, Anniversaries, shows etc. There are companies that have recently entered the market that do a full service marketing like GOSRT and MARKET MYSTR and others that provide templates and help but you have to actually do some work like STRDIGITAL and BOOSTLY. Good luck.

  • Flipper/Rehabber · Phoenix Arizona · Member since 2020 · 1k+ posts · 686 votes
    2y

    Scott call/ text on my phone on my profile starting at

    719

    Thanks 

    David

  • Investor · Central Florida · Member since 2022 · 2 posts · 1 vote
    1y

    Scott, google search mashing brought me to your post. I have a similar background as you with flips, commercial transaction, long term rentals etc (maybe on a smaller scale with the spec builds), but have been managing 3 of my own short term rentals over 8 years. 

    I've been trying to figure out what I wanted to do next, also considering purchasing an existing local business. I am now researching building my own short term rental managment company in the Central Florida market. VERY saturated, but I think there is opportunity in some of our smaller cities that are being outshadowed by the Orlando STR's.

    Curious if your still running your management company? If so, how has growth been?

  • Property Manager · Chattanooga, TN · Member since 2018 · 175 posts · 134 votes
    1y

    Congratulations @Scott E..  My wife and I have recently started a similar journey following a similar thought process and background.  I'm also curious for an update.  Now that a year has passed, my question is, what have been the most effective strategies for finding clients?

  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    1y

    @Chris Cranias and @Tyler Divin - Was interesting to see this old post brought back! I still am running the company and have since onboarded 4 clients. I've learned a ton, gained a ton of experience, had some long nights, but overall very pleased with the first year in business.

    Once I onboarded property #4 I realized I was getting close to my max in terms of how many properties I can take on with no other employees or outside help, while still being able to dedicate ample time to my 2 other businesses (I'm also a general contractor and content creator).

    My plan is to hover around 5 properties for the long haul. It's a small enough number of properties to allow me the opportunity to provide white glove service to my owners and my guests, but it's enough properties to still create a good source of cash flow for me. If I was dedicating myself to this business full time, I think I could get to 10 properties before needing outside help.

    • Enzo Di PalmaBusiness Member
      Realtor · Miami Beach, FL · Member since 2019 · 32 posts · 9 votes
      1y
      Quote from @Scott E.:

      @Chris Cranias and @Tyler Divin - Was interesting to see this old post brought back! I still am running the company and have since onboarded 4 clients. I've learned a ton, gained a ton of experience, had some long nights, but overall very pleased with the first year in business.

      Once I onboarded property #4 I realized I was getting close to my max in terms of how many properties I can take on with no other employees or outside help, while still being able to dedicate ample time to my 2 other businesses (I'm also a general contractor and content creator).

      My plan is to hover around 5 properties for the long haul. It's a small enough number of properties to allow me the opportunity to provide white glove service to my owners and my guests, but it's enough properties to still create a good source of cash flow for me. If I was dedicating myself to this business full time, I think I could get to 10 properties before needing outside help.


       Would you be open to discussing the avg net profit for each property? Are all properties rental arbitrage deals? 

    • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
      1y
      Quote from @Enzo Di Palma:
      Quote from @Scott E.:

      @Chris Cranias and @Tyler Divin - Was interesting to see this old post brought back! I still am running the company and have since onboarded 4 clients. I've learned a ton, gained a ton of experience, had some long nights, but overall very pleased with the first year in business.

      Once I onboarded property #4 I realized I was getting close to my max in terms of how many properties I can take on with no other employees or outside help, while still being able to dedicate ample time to my 2 other businesses (I'm also a general contractor and content creator).

      My plan is to hover around 5 properties for the long haul. It's a small enough number of properties to allow me the opportunity to provide white glove service to my owners and my guests, but it's enough properties to still create a good source of cash flow for me. If I was dedicating myself to this business full time, I think I could get to 10 properties before needing outside help.


       Would you be open to discussing the avg net profit for each property? Are all properties rental arbitrage deals? 


      My fee is 20% of gross rents. These properties each bring in between $50k - $90k per year in rents. Of course I have some internal expenses but they are minimal. As I said above, I'm personally handling everything. No employees.

      These are not rental arbitrage. Like I said I started a property management company. I'm managing short term rentals for property owners.

  • Enzo Di PalmaBusiness Member
    Realtor · Miami Beach, FL · Member since 2019 · 32 posts · 9 votes
    1y

    At the height of the STR craze, our company scaled up to about 20 doors and held operations for a few years. At some point, we determined it wasn't worth the squeeze... though by no means am I questioning your business. I'm sure there's still plenty to learn in the space.

    I asked about arbitrage because I’ve recently taken on a couple, and they’re netting about 2.5–3x the profit compared to pure management. There’s slightly more upfront cost and liability, but after that, it seems to run more efficiently. Have you considered going this route?

    • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
      1y
      Quote from @Enzo Di Palma:

      At the height of the STR craze, our company scaled up to about 20 doors and held operations for a few years. At some point, we determined it wasn't worth the squeeze... though by no means am I questioning your business. I'm sure there's still plenty to learn in the space.

      I asked about arbitrage because I’ve recently taken on a couple, and they’re netting about 2.5–3x the profit compared to pure management. There’s slightly more upfront cost and liability, but after that, it seems to run more efficiently. Have you considered going this route?


      Interesting. What I think has made it really worthwhile for me is I am extremely particular about what properties I take on. I would never refer to my homes as "doors". I'm not targeting "doors". I'm targeting highly desirable properties, in A+ locations, with high cash flow potential, owned by real humans who are interested in getting a return better than they'd see if they were to go the long term rental route.

      If you hand pick the right properties, in the right locations, that are finished and furnished the right way, you can bring in $100k per year as a boutique property manager with only 5 clients.

      I'm not interested in rental arbitrage myself, but happy to hear you are having success with it.

  • Enzo Di PalmaBusiness Member
    Realtor · Miami Beach, FL · Member since 2019 · 32 posts · 9 votes
    1y

    Gotcha… those are solid returns. I’m sure having those A+ properties in your portfolio makes it even easier to attract new clients. Hand-picking the right homes in the best spots definitely seems like the key. I get why rental arbitrage isn’t your thing, but yeah, it’s been working well for me. Do you see any challenges with scaling your model, or are you planning to keep it boutique on purpose?

  • Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes
    1y

    Congrats!! always keep improving your systems and it'll become more and more efficient. Make sure to always provide quality service as well. Don't ever sacrifice that. there are a lot of management companies out there who don't live up to what they initially said. 

  • Investor · Central Florida · Member since 2022 · 2 posts · 1 vote
    1y

    @Scott E. Thanks for the reply! I think we are very in line with plans for STR's as I really dont want any employees are additional partners. I already manage three STR properties, and think I would really only be interested in adding 3-4 additional for clients. Especially as I still intend to keep up with my own flips, and plan to increase that portion of business as well.

    I just recently set up my new channel manager with lodgify for my properties, so hoping that adding new properties will mostly be plug 'n play from there. 

  • Investor · CA · Member since 2021 · 70 posts · 14 votes
    1y

    Wow congratulations this definitely motivates me even more. I am also trying to start a property management company as well. I would love to connect with you. I'm in California but I have so many questions. 

    • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
      1y
      Quote from @Nikki Nicole:

      Wow congratulations this definitely motivates me even more. I am also trying to start a property management company as well. I would love to connect with you. I'm in California but I have so many questions. 


      Happy to help any way I can... you can post questions here or send me a private message if you prefer.

  • Real Estate Agent · Worcester, MA · Member since 2024 · 107 posts · 45 votes
    1y

    Love this! Congrats on making the jump into STR management—it's a grind but super rewarding when done right. Your background in flipping/building gives you a serious edge in spotting design and operational inefficiencies most people miss. I'm also in the STR game and can relate to that "chasing contractors" life 😅. Excited to see where you take this!

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