Hi Everyone! I'm thinking about starting a STR Property Management Company and was wondering if anyone had advice regarding how I can potentially obtain clients. Any assistance would be greatly appreciated.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
7y
@Christine N. Do you own any of your own STRs and do you manage them? If so just look for folks that want co-hosts on AirBnB if you have a ton of reviews they’ll pick you.
If not then what the heck are you doing? I’d rather bartender at Applebees than manage other people’s STRs.
All kidding aside you’ll need a license and insurance to legally manage other people’s properties unless you’re just co-hosting but you’ll be stuck with AirBnB only. The other platforms don’t offer co-host.
I’ve got over 1000 5 star reviews and the thought of doing this gig for other people’s properties makes me cringe. If you’re literally brand new my best suggestion is to reconcider. Give the forum more insight into your situation and we can help more! What market are you in? Are you even in a market? What market do you want to be in? Etc
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
7y
@Christine N. Do you own any of your own STRs and do you manage them? If so just look for folks that want co-hosts on AirBnB if you have a ton of reviews they’ll pick you.
If not then what the heck are you doing? I’d rather bartender at Applebees than manage other people’s STRs.
All kidding aside you’ll need a license and insurance to legally manage other people’s properties unless you’re just co-hosting but you’ll be stuck with AirBnB only. The other platforms don’t offer co-host.
I’ve got over 1000 5 star reviews and the thought of doing this gig for other people’s properties makes me cringe. If you’re literally brand new my best suggestion is to reconcider. Give the forum more insight into your situation and we can help more! What market are you in? Are you even in a market? What market do you want to be in? Etc
On a side note, I didn't think Airbnb had their co-hosting program any longer. Seems like they've been pushing to get into the Property Management biz themselves and killed that as an option. At least it looks that way here in Nashville. Maybe I'm wrong though.
Rental Property Investor · Campbell, CA · Member since 2017 · 419 posts · 499 votes
7y
@Steve Frye they did kill it... at least ‘for compensation’. Co-hosts exist the same as before but they killed the ability of paying a co host for their work... which essentially kills the program.
I’m going to use my crystal ball and tell you AirBnB’s strategy:
1. Grow the Airbnb plus platform (they’re expanding it like a weed)
2. Begin offering Airbnb cleaning services... probably with a new badge highlighting your commitment to cleaning perfection
3. Begin offering property management professional services. (at the top of search results you’ll see “hosted by Airbnb”.
My guess is within 3 years we’ll see all the above in major markets. Killing co-host was just their first step.
Real Estate Agent · Nashville, TN · Member since 2018 · 123 posts · 74 votes
7y
@Mike V. I think you're spot on. They've partnered with a company called Niido here in Nashville to take over a downtown hotel and turn it from residential condos to one thats permitted for STRs across the entire development. They LT lease out the units and let people turn around and STR them out for a profit. They might require the lessors to use their PM and cleaning services but I'm not sure.
Good approach for some without the high equity commitment but it's funny that the same city that banned any further NOO STR residential permits (you can do them on commercially zoned lots), totally green-lighted this huge project.
Investor · Denver, CO · Member since 2016 · 533 posts · 433 votes
7y
It is possible @Christine N., however you're receiving some sound advice, especially from @Luke Carl, a seasoned STR veteran. On the surface, this business seems really simple (the OTA's con-game to get you to drink their cool-aide). Don't be fooled, this is a HARD and monotonous business (I wasn't nearly this grey 4 years ago). I do know of a few local PM's in my area, however they have leveraged this business as a "bolt on" to their existing real estate practice, a nice model that has worked well for them, but there are constant and ongoing challenges. With just 4 properties of my own that I self-manage, I receive daily (and nightly) requests from guests, my cleaning crew, handymen, etc.... I am on call 24x7x365. I eat, drink, and sleep thinking of all the little things that need to be done. So, multiply this by "X" properties and you're adding staff and resources to manage this I assure you. If you believe you can charge 25-40% commission (the going rate for most PM's depending upon your market), you may be able to grow this business, but it's going to be a steep learning curve and may not be enough return to justify the effort.
Please keep us posted on what you decide and sorry to be a bearer of dissuasion.
I current run a STR on my personal property and I fortunately make more than double what I would with a LTR on that particular property. I also manage a property for a friend and he makes more than double his usual LTR rate there as well. I was being extremely generous and only charged 14% initially. I'll have to adjust that accordingly.
Why do you guys think negatively about STR property management? I envisioned managing maybe 4-5 properties max and then eventually would take on a partner to manage others. I plan to obtain insurance. Why is a license needed? I didn't think it was in CO...
Any additional advice would be greatly appreciated. Thank you guys so much!
Realtor · Austin, TX · Member since 2018 · 52 posts · 32 votes
7y
@Christine N. I am not familiar with Colorado, but in Florida, you are definitely legally required to have a Broker's license (and possibly a brokerage, not certain) to manage property that is not your own.
Why do you guys think negatively about STR property management?
To me, if someone has the resources to buy rental properties and turn them in to STRs, they should have the intelligence to self manage them. Or at least have the intelligence to know that they are paying someone else a good chunk of change to do what they could be doing. I have 23 STRs with 82 beds in this town. It's my unofficial full time job, 24/7/365. I manage the marketing campaign, maintenance, rent collection, roofing, appliance repair, all electrical work from the breaker box on out, and any plumbing that does not involve the sewage system under the ground. My wife is in charge of cleaning and restocking them between vacancies.
@Caleb Richardson I know a license is needed to manage a LT rental but I thought it wasn't necessary for STR...?
@Paul Sandhu The property management industry wouldn't exists if that logic were correct. Some people may have day jobs or STR management may be too much for them to handle.
@Christine N. I am not familiar with Colorado, but in Florida, you are definitely legally required to have a Broker's license (and possibly a brokerage, not certain) to manage property that is not your own.
There is a legal exception to the FL statutes. Anyone can open a STR mgmt company without a license. However, if ANY units fall outside of that category, a RE license is required.
Realtor · Austin, TX · Member since 2018 · 52 posts · 32 votes
7y
@Christine N. I am only knowledgeable of Florida rules, but I am definitely not a lawyer.
To give you an example, my significant other is employed as a property manager for a STVR company here in Destin. She does not need a real estate license in the state of Florida because the company she is employed by has a broker's license.
Not sure about Colorado, but there are a variety of exemptions here too.
Realtor · Austin, TX · Member since 2018 · 52 posts · 32 votes
7y
@John Thedford Interesting! I remember learning about some of the other random exemptions, but that is not one that I was aware of. What is their definition of Short-Term?
@John Thedford Interesting! I remember learning about some of the other random exemptions, but that is not one that I was aware of. What is their definition of Short-Term?
I don't recall offhand. It falls under the same category of hotel's etc..
Property Manager · Denver, CO · Member since 2014 · 104 posts · 81 votes
7y
@Christine N. You must have a real estate license in CO if you are going to charge for your property management services. It does not matter if it is long term vs short term. The real estate commission is going to require the license either way. We manage long term, but not short term as it is not profitable and very time consuming to manage. Maybe consider managing long term first and getting your license??
@Marc Cunningham, you responded to that post above, said you would check with the RE board here, and then came back and posted that it was legal. This was about a year ago. Has something changed since then?
@Christine N., even running 4-5 properties can be a task. You'll want to automate as much as possible. Fortunately, there are lots of different products available to help you do this. But they all cost money, which of course eats into your profits. My advice would be to look for the ones that charge a monthly fee, as opposed to a percentage of revenue.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
7y
@Christine N. It blows my mind how unregulated this industry appears to be. You need a broker to sponsor you to manage long term rental property but not short term lol? Why would you not be held to the same professional standards as other rental property managers?
Realtor · Austin, TX · Member since 2018 · 52 posts · 32 votes
7y
@Christine N. Do great work, stay excessively organized, create a marketing plan and execute it consistently, take care of your people, donate a small portion of your profits to your favorite local charity, stay involved in your community, participate in any local city council/HOA meetings regarding rentals, understand your industry and be able to articulate what you do, how you do it, and why you are better than the other companies in your area.
If you can keep that up, you'll do great! I'm not sure where the best place to start might be, but organic growth takes time and dedication.
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
7y
In terms of getting clients, set up a property management web site, a facebook profile for your management company, and get your business set up on Yelp. Get your existing client, and a few guests, to review you on Yelp and via Google. That'll be a good start.
If you were able to line up and attract clients from other sources besides Airbnb, VRBO, and TripAdvisor then I think you would have a very strong business proposition.
Being able to attract clients outside of these heavily monitored sites really puts you in the driver's seat. You'll be able to do more and better minimize vacancies.
This does require some effort upfront. It will require you to meet people in real time. But the investment will help you stay in business with the there's a big change in the market.
Property Manager · Denver, CO · Member since 2014 · 104 posts · 81 votes
7y
@Garry C. you are correct and I was INCORRECT in my above post. I did check with the Colorado Real Estate commission.
So to correct my above statement: If you are managing short term rentals in Colorado, you do NOT need a real estate license. The real estate commission does not give a definition of 'short term' vs 'long term', other than to say with 'short term' rentals there is no lease agreement in place.
However, they also state that if you DO have a real estate license, then your short term rentals fall within the guidelines and purview of the real estate commission.
So if you are going to only manage short term rentals in Colorado - you are may be better of NOT getting your real estate license.