STR Property Management Business Questions

[Christian Grosskopf]

Hello, I am soon to be a licensed realtor here in Kentucky. I'm just gathering information on people's experience with property management, specifically STR's. I plan on taking on some property management duties for fellow realtor friends that I can handle myself, but those are for long term rental properties. Some questions I have are:

Are the margins with STR property management better than long term properties?

What does a beginner level STR property management business look like? What sort of team should be established first?

What do STR property management companies typical charge?

What service is most important to master?

Is there a lot of competition amongst STR property management companies? Is the entry level more difficult to get into?

What's a good way to "dip your toe" in this type of business?

I have plenty more questions but just want to get some peoples' opinion on the basics of the business and if it's worth investing much time or effort into. Thanks!

[James Wilcox]

Quote from @Christian Grosskopf:

Hello, I am soon to be a licensed realtor here in Kentucky. I'm just gathering information on people's experience with property management, specifically STR's. I plan on taking on some property management duties for fellow realtor friends that I can handle myself, but those are for long term rental properties. Some questions I have are:

Are the margins with STR property management better than long term properties?

What does a beginner level STR property management business look like? What sort of team should be established first?

What do STR property management companies typical charge?

What service is most important to master?

Is there a lot of competition amongst STR property management companies? Is the entry level more difficult to get into?

What's a good way to "dip your toe" in this type of business?

I have plenty more questions but just want to get some peoples' opinion on the basics of the business and if it's worth investing much time or effort into. Thanks!

@Christian Grosskopf well first and foremost you need to make sure your broker allows PM. Not all brokerages do. You need a PM division in your brokerage. Answers to your questions below though.

Are the margins with STR property management better than long term properties?

Yes, since you charge more for STR PM services and the GRI is in general higher per property. More management intensive though.

What does a beginner level STR property management business look like? What sort of team should be established first?

In general, you need a great PM software. That will handle a huge amount of the bulk of the work. Also you need a PM agreement for owners to sign of course. You need a couple of great cleaners that are STR focused, software to manage them as well, and several trades and handyman services for the area. I would pick a general area first and expand from there. Geographically close to where you area is best to start.

What do STR property management companies typical charge?

Ranges as it depends on what the agreement says and the services that are provided. Usually around 20% of GRI per month is a good ballpark.

What service is most important to master?

Pricing and calendar management

Is there a lot of competition amongst STR property management companies? Is the entry level more difficult to get into?

Yes. Just as difficult as any other entry into any industry.

What's a good way to "dip your toe" in this type of business?

As @Mike Grudzien said co-host on the Airbnb platform would be kind of a way to go about it. However, with a license you are held to a higher standard so that is about the only option that isn't full scale PM. If anything you could go work for a PM company instead of starting one from scratch.