I have been flipping for 7 years and done 60+ homes but this will be my first Vacation Rental. I am pretty busy between family and work as it is but I am mostly curious about the pros and cons of self managing vs full service management from some of you folks that have experience with it. The house is in South Lake Tahoe which is a great market for vacation rentals. The house is zoned commercial which is rare and means that I can get the permit from the city. South Lake just passed a bill that heavily restricts short term rentals, very limited new permits and most existing are getting shut out in 2021(if the bill doesn't get overturned).
I met a guy playing poker the other night that told me that he owns 10 short term rentals spread out around the country, works a full time job and self manages. I wasn't able to get into too much detail at the poker table but he said his wife and him handle the bookings and that a reliable cleaner and handyman is all you really need. That vrbo and airbnb is enough to get plenty of bookings and that there platforms ingrate with each other. We have a mutual friend which makes his story a bit more reliable but I need your help to figure out if he was bluffing.
Vacasa was the front runner of the management companies that I looked into. They charge 35% but my point of contact said he could get me 30%. I like the idea of not having to do anything but seems quite expensive. They also say that they are on 20+ sites and use dynamic pricing to maximize number of bookings.
I got a really good deal on the home because of a problem tenant/squatter. I am just met the sheriff there last week and was able to get in and start work. it is currently a 2/1 that I am going to make into a 3/2 by taking out a large wood burning fireplace, shrinking the closets and moving the laundry into the garage. I am thinking I will add a hot tub and a small back patio as well. I will put in the life-proof flooring throughout, new kitchen and bathrooms. I am going to put in new windows. Trying to balance budget with durability and efficiency.
Thanks for your help!
Your poker friend is telling the truth. I self-manage 4 vacation rentals long-distance in two markets, and all I need is a great cleaner and occasionally a handyman. Keep that 30% for yourself!!! All you need is the ability to check your phone regularly and respond to messages, which is probably already something you're doing.
@Jon Crosby is our local Tahoe expert, he's got a property in the area and I'm sure he'll have some good insight for you. Congrats on the commercially-zoned find, and best of luck as you start your journey!
I agree 100% with @Julie McCoy . Keep that management fee for yourself and find a great cleaning person to be your eyes and ears. You can remotely manage with minimal time and your phone.
You sound smarter than average person who posts on here asking the same general questions that you are asking. I'd be a bit leery about being shut out in 2021. So have a backup plan in case you can't do STR with the property.
You also don't have to market your STR towards vacationing people. I have 23 STRs in this town, with 82 beds total. My renters are refinery contractors doing specialty maintenance and construction. It's a full time responsibility, but I wouldn't call it a full time job. Cleaning between occupancies and minor repairs/maintenance will be your bigger responsibilities. My furthest STR is 8 minutes from home, so I do most everything myself, except cleaning. There is a lady that does the cleaning for me for free, and I get to sleep with her.
@Mike Harding you’re going to succeed as a self manager. Anyone can do it but I can tell you’ll be great at it. Feel free to schedule a call in my profile I’ll teach you the ropes takes about an hour.
@Mike Harding , I second pretty much what everyone else says, but there are a few things about Tahoe that I learned.
First is the noise restrictions. They are very intolerant of noisy people in town. All it takes is one neighbor to complain a few times and you are out of business.
Things are really heating up in that market and not in a good way. $1000 fines for one too many cars.
Seeing as you are in a commercially zoned area, you might escape some of the regulations and they seem to be directed at residential neighborhoods.
In addition to the comments above, when I was stationed in Monterey, CA, the MWR office had vacation rentals that service members could use in Lake Tahoe. I don't know exactly how they contracted these. If you were able to market directly there, then you may have exemptions to city ordinances as well as a niche / easier path to market. I get the same exemptions when I work directly with the University in my town. See below for examples,
Hi @Mike Harding , congrats on your acquisition! As @Julie McCoy mentioned (thanks Julie) I have owned/managed a few places in Tahoe including SLT, however ours were in the county area (Tahoe-Paradise) which so far is still free of the STR regulations. We did sell that property however and now own one in Tahoe City on the West/North Shore.
Sounds like your questions are more based on self-managing of the VR's rather than specific to Tahoe but you already got a ton of great feedback from the A-team on this site so far. I currently use a hybrid method of self managing where I let Evolve Vacation rental handle everything up until the guest checks in and then I take care of anything during their stay. I pay 10% for Evolve (plus 3% for any CC transactions) and they handle all bookings, calendars, pre-stay information and communications as well as payouts and listing setups (even professional photography).
Not trying to sell Evolve or it's services in any way, but it goes to my next point which is that I self manage the property beyond that from Rocklin, CA using automated door locks, good housekeeping and making nice with all my neighbors when I can. :) When all systems are firing I don't spend more than 5 minutes per booking and that's just to plug them into my communication automation and get their code entered into the lock system.
The housekeeping is the big wildcard. They are not going to always do a consistent job with regards to inspecting your property for issues post checkout. With the full service options they are specifically going to do that and go thru all the hassle of getting things fixed (at least they should be). But since you are apparently in construction already, and live just down the road in Reno I personally would just self manage everything yourself (including bookings). Once you get your systems dialed in you will reap the rewards of not paying any type of management fee. I used Merry Maids out of Minden for our SLT property housekeeping. They weren't the greatest cleaners per se, but they were always there when they said they would be even through massive snowstorms.
Feel free to reach out if there are any other specifics I can answer for you and congrats again!
As mentioned, get a Rock star cleaner and handyman. Also load the place up with smart home tech. Keyless entry, Arlo camera at entryway/ driveway, wifi thermostats, leak sensors and a integrated water main shutoff valve. Also get a str insurance policy to replace your homeowners from a company like Proper or CBIZ. Proper gives a 15% purchase discount and 10% premium credit on "Flo by MOEN" water monitor system
Hi Mike, and congratulations on your first STR! All of the advice given here is spot-on and absolutely correct.
I used to work for VRBO, which was begun in the early 1990s to help owners of vacation rental properties manage their STRs themselves instead of having to hire a property manager to do it. One of my first responsibilities at VRBO was to manage the founders' STR in Maui (from CO). So yes, it can be done especially with some of the technology, tools & systems in place that the other BP members have suggested.
There are sevaral ways one can go about handling the management of a vacation rental property.
- You can hire a full-service property manager
- You can hire a service that assists in the management of the bookings & communications with travelers
- You can handle all aspects of your vacation rental property themselves ("by owner".)
A full-service property management company (#1 option) is just that: they handle every detail and aspect of offering a property for rent on the vacation rental market, from advertising the property on their own Property Management Company website, to handling inquiries and reservations, key-handling, cleaning and maintenance. Rates for a full-service property manager range on average from 25% - 60% (depending on your area.)
The #2 option handles everything except the actual cleaning & maintenance of the property. This kind of service helps owners with the advertisement(s) of their vacation rental property as well as handling all communications with travelers before, during & after their stay, handles payment schedules, send rental agreements, communicate with the housekeeping/maintenance staff and follow up with the guests to request that they submit a review of their stay at your property. The professional and comprehensive handling of your reservations is critical if you want to maximize your investment in your vacation rental business. Typically the fee for this type of service is not as expensive as a full-service property manager and well worth the benefit of the extra time you'll have for the things that are more important to you. Evolve is one such company, but there are other smaller, more "personal" services also.
The #3 option is the most profitable, as you've heard from other BP'ers here. It is the biggest time investment of the three options but also the biggest payoff. I would not recommend you attempt to self manage unless you have the time to quickly respond to inquiries & guests and make sure you are professionally & comprehensively handling all of the things I mentioned in the #2 option AS WELL as have a very good dependable local team in place to help with the property maintenance.
Good luck in your new venture!
Mike, I own two vacation rentals and manage one for a client. Unless you work in a very time-consuming field (doctor or lawyer), you can definitely manage it yourself. Set up VRBO or AirBnb on instant book, and just let the money roll in.
I have not heard anything good about Vacasa here on Maui where the going rate for management is 25%.
Right before I got married a few years ago I paid a manager to set up my first vacation rental since I wanted to focus on the wedding. I'm a real estate broker myself and first got into the business managing vacation rentals, so I kind of figured I'd take over myself at some point.
My experience with having a manager was: one, she didn't spend my money wisely. She told me to return a rug I got for under $50 at Ross then later bought a ridiculously shaggy one that was difficult to clean for 3x the price at Home Depot. And spent over $1k on stuff to stock the kitchen without my permission, when our contract only authorized her to spend $500 without permission. So I would say if you decide to pay a manager NEVER LET THEM SHOP FOR YOU.
Two, she messed up the date of a family member's visit, double booked the condo and actually asked me to pay for her mistake. Of course I said no.
Three, she didn't put the property on Airbnb like I asked, so I did it myself.
Four, she would hold dates without payment, which I specifically instructed her not to do.
Needless to say, she only worked for me for a couple of months because I realized I could do a better job myself. Paying a manager may shield you from some liability, but it will not save you money. In my experience, very few property managers earn their fee. Most go into it because they are too lazy to be realtors. (Yes I do both these jobs.)
Of course, if you are the type of person who doesn't like to hold people to their agreements (and I think this is unlikely given you've been flipping houses for a while), you might like to have someone else be the bad guy and manage your property. That's my 2 cents.
Don't use Property managers. Don't use vacasa or evolve or other synthetic property Management companies. Remote manage using a good PMS like guesty or ownerreservations.com. Automate.
@Paul Sandhu , Hi Paul, I am looking into STR for one of my properties and I heard about renting out to long term business travelers who travel for their job and stay up to 6 months or more at a time. Sounds great but I'm not sure how to get connected with a company that does that. Do you mind sharing how you came about renting for the contractors for a long period?
Thanks in advance
@Mike Harding how did this pan out? I live in Reno and manage a 3/1 STR in Missouri. We netted $2600 in June. It's great.
That’s a real treasure having the ability to get the permit in SLT.
One month into rehab. Trash out and demo is done working on getting it out back together. Only slightly behind schedule and over budget.
I’m fairly fresh at this, but my rental is doing pretty well. I also renovate and have long term rentals. Will be an interesting year, in comparison. I’m already looking for my next property.
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