Anyone Doing Long Distance Short Term Rental Successfully?

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Anyone Doing Long Distance Short Term Rental Successfully?

Aldo Balatti
Investor · Ottawa, Ontario Canada · Member since 2019 · 21 posts · 6 votes

I am in Canada and interested in having a vacation property in the US for short term rental in a long distance/far away market from where I am living. I am interested in having the STR property fully managed by a turn-key short term rental management company which takes care of everything and all the STR property marketing, bookings, maintenance, cleaning , etc. From my research, these turn-key STR management companies provide this full turn-key service for 20% - 30% of all the bookings.

Since I am living far away from the STR property, I am interested in knowing if anyone has had any success or issues with this type of long distance STR model? This could be with using a purchased rental investment property or using a STR arbitrage (sub-leased from a landlord) property. I am interested in knowing the pros and cons and what to look for or watch out for from people that have used this long-distance turn-key model.

Thanking you in advance and very much appreciated any insight and feedback you can share!

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Julie McCoy
Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
7y

Everything @Jon Crosby said.  It is absolutely possible to manage your rental yourself from a distance (mine are 200 and 2000 miles away from me, respectively) with minimal time investment.  Generally speaking a PM is going to take the lion's share of your cash flow, so if you don't absolutely need them, the cost isn't worth it.  20-30% is a good estimate, but in my primary market 30-40% is the going rate - and the performance a property gets through a PM is not going to be as good as one that is self-managed!  

Definitely find a target market first and then start crunching numbers.  The majority of my properties are in Gatlinburg/Pigeon Forge, TN and it's fantastic for high occupancy and cash flow.  The area has been a mecca for vacation rentals for a long time, and the local economy and service professionals are completely entwined with the industry.  I'm happy to answer any questions you have about the market or logistics of operating there, if you like. :) 

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  • Account Closed
    Financial Advisor · CA · Member since 2012 · 128 posts · 76 votes
    7y

    I think I remember watching an actual Bigger Pockets Youtube video of a young lady who does this.  She seemed to be doing okay.  You could look it up.

    0Reply
  • Jon Crosby
    Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
    7y

    Hi @Aldo Balatti, yes there are many people who find success in remotely managing properties and many actually do it without the need for a full turnkey property management using various systems, automation, and other relationships to help them succeed.  It's really going to depend on what your wants, needs and desires are with the property and what level of comfort you have with being remote with respect to the different variables necessary to run a successful VR.  

    One might even argue you are more vulnerable going full turnkey PM as you will have zero visibility on your investment until you actually visit it since you will be at the whims of whatever the PM thinks is best for your asset.  

    If you are going to invest remotely, I suggest narrowing down the regions/markets you are would like to invest in, then take each step of due diligence to figure out what that market offers, any downsides to not being local, etc.  Then couple all that back with how much you actually have to invest because 20-30% of your revenue could likely push you into negative cashflow. 

    Lots to consider so I would just take it one step at a time and for me that would be figuring out a market to target first.  

    Best of luck!

    4Reply
  • Julie McCoy
    Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    Everything @Jon Crosby said.  It is absolutely possible to manage your rental yourself from a distance (mine are 200 and 2000 miles away from me, respectively) with minimal time investment.  Generally speaking a PM is going to take the lion's share of your cash flow, so if you don't absolutely need them, the cost isn't worth it.  20-30% is a good estimate, but in my primary market 30-40% is the going rate - and the performance a property gets through a PM is not going to be as good as one that is self-managed!  

    Definitely find a target market first and then start crunching numbers.  The majority of my properties are in Gatlinburg/Pigeon Forge, TN and it's fantastic for high occupancy and cash flow.  The area has been a mecca for vacation rentals for a long time, and the local economy and service professionals are completely entwined with the industry.  I'm happy to answer any questions you have about the market or logistics of operating there, if you like. :) 

    5Reply
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    7y

    Everything that @Jon Crosby and @Julie McCoy said! The vast majority of owners in my market live and manage their properties from at least 3 states away and have great success. 

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    7y

    What @Jon Crosby said. ++ 

    The best part about STR is that it can be self managed from a distance very easily if you choose the right market. Big bear, Branson, etc.

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    7y
    Just to add to the pile. Our vacation home is about 360 miles from us and we manage it all remotely. No way I would pay 30% to a PM. We would lose any hope of profit.
    What you need to do is find the area then start looking at cleaners and handypersons that can be your boots on the ground.
    If you get good folks in that space, then you can move forward with the rest.
    It isn't a cakewalk, but it ain't rocket surgery either.
    1Reply
  • Michael Corso
    Lender · Wildwood Crest, NJ · Member since 2017 · 317 posts · 56 votes
    7y

    @Aldo Balatti it's very hard to keep an eye on your investment so far away but sometimes it has to be done. Do your research and find a good Property Management Company to assist you.

    1Reply
  • Jake Miller
    Flipper · Huntington Beach, CA · Member since 2016 · 83 posts · 40 votes
    7y

    Yup I own and run a few vacation rentals on the west coast and I live on the east coast, I’m also developing 10acres of land into more currently. 

    The key is having reliable cleaners and handymen and boots on the ground. I wouldn’t do a property management company as has been mentioned many times above they take waaaay too much of your profit. 

    1Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y
    I would start with ask yourself why  you need something far away? If you were in Ottowa, I'm sure there is some kind of markets near you. Regardless of what everyone says,  the risks and problems of. Management only magnify  when you are nowhere close

    Originally posted by @Aldo Balatti:

    I am in Canada and interested in having a vacation property in the US for short term rental in a long distance/far away market from where I am living. I am interested in having the STR property fully managed by a turn-key short term rental management company which takes care of everything and all the STR property marketing, bookings, maintenance, cleaning , etc. From my research, these turn-key STR management companies provide this full turn-key service for 20% - 30% of all the bookings.

    Since I am living far away from the STR property, I am interested in knowing if anyone has had any success or issues with this type of long distance STR model? This could be with using a purchased rental investment property or using a STR arbitrage (sub-leased from a landlord) property. I am interested in knowing the pros and cons and what to look for or watch out for from people that have used this long-distance turn-key model.

    Thanking you in advance and very much appreciated any insight and feedback you can share!

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    7y

    As everyone one else is saying the secret to success in remotely managing a VR is great cleaning people and a handyman. If you could find s cleaning person who has a husband who is a contractor would be an excellent fit. 

    I only live an hour away from my VR but I could move anywhere in the world and keep our VR running and without an expensive PM.

    1Reply
  • Emir Dukic
    Rental Property Investor · Charlotte, NC · Member since 2019 · 57 posts · 26 votes
    7y

    @Aldo Balatti Echo what everyone else said. Good resource to at least start looking for cleaners (which often can be handymen for simple fixes) is Turnoverbnb

    0Reply
  • Aldo Balatti
    OP
    Investor · Ottawa, Ontario Canada · Member since 2019 · 21 posts · 6 votes
    7y

    @Account Closed  Thank you for the mentioning the BP podcast which I will look for!

    @Jon Crosby and @Julie McCoy and @Avery Carl and @Luke Carl and @Michael Baum and @Michael Corso and @Jake Miller and @Ken Latchers and @John Underwood and @Emir Dukic  Thank you so much for all your comments, insight and feedback which is very much appreciated!  

    I would only be focusing on only one area and market and the based on what I am hearing, the full turnkey service might not be the best way to go... I will need to do research and due diligence to see if this long distance STR model makes sense for me!

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    4Reply
  • Aldo Balatti
    OP
    Investor · Ottawa, Ontario Canada · Member since 2019 · 21 posts · 6 votes
    7y

    @John Morgan Thank you for sharing about your turnkey managed STR property and letting me know that the turnkey STR model is working and making money for you!

    That is the initial STR model that is of interest to me, like yourself, I do not have time to take care of running a STR unit or over time, if I get multiple units in one area or in various STR markets... I am also liking the short term rental arbitrage model as there might be more monthly cash flow revenue, depending on the property, location and market of course, but the downside is that there is no appreciation and no equity pay down overtime but the exit strategy is fairly simple and easy to execute and you can always scale-up the number of units and stay or go to new STR markets if you need as you do not own any investment STR properties.

    1Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    @Aldo Balatti

    I ended up buying another STR in the same area as my first one since it was such an easy investment with the management company doing everything for me keeping it occupied 15-20 days/month most of the year. However, I was worried about an economic downturn and the uncertainty of visitors during bad times, so I sold one of them. I've only been in the STR game for less than 5 years. I would be curious to see how people have done on their STRs during bad times.


    After selling one of my cabins, I decided to get into SFRs. I figured during bad times, I could probably still find someone to rent out my homes..even if I have to drop the rent 10-15% to keep them from being vacant. Not sure how much traffic my STR will get with a slow economy.

    0Reply
  • Account Closed
    Financial Advisor · CA · Member since 2012 · 128 posts · 76 votes
    7y
    Originally posted by @John Morgan:

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    Great area.  May we know the management company you use?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Account Closed:
    Originally posted by @John Morgan:

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    Great area.  May we know the management company you use?

    I use Sunset Nightly Rentals. They do a fantastic job marketing it and taking care of my guests. It's worth the 30 or 35% fee they charge. STRs are so much more demanding. I'm not about to take on that task managing it from out of state. I have 6 STRs near me in Texas that I manage myself which is easy. But managing a STR our if state? No thanks!

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y
    "I don’t have the time to deal with it, reservations, guests, maintenance etc." 

    this is 2019. If you know what you're doing, you can automate much of that a lot cheaper than 35%. They make 35%, you make 10%.it isn't worth it. 


    Originally posted by @John Morgan:

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Ken Latchers:
    "I don’t have the time to deal with it, reservations, guests, maintenance etc." 

    this is 2019. If you know what you're doing, you can automate much of that a lot cheaper than 35%. They make 35%, you make 10%.it isn't worth it. 


    Originally posted by @John Morgan:

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    My wife HATES when I spend time away from her and the family dealing with our rentals. I hire out everything except managing my 6 local SFR. Those are easy to manage. When something breaks, I text someone to go fix it right away. Done. However, managing our out of state nightly rental takes more than a text or two and not worth the stress in my marriage to have to keep dealing with little and big issues that come up. Last month I had a leaky roof that was leaking in two different areas on my wood floors the day my guest arrived..on a Sunday. And more rain was in the forecast for several days! My management company got someone to come deal with it right away. I had squirrels get up into the attack two separate times and chew electrical wires causing the power to go out..a day before Thanksgiving one time. That's a phone call not worth my marriage suffering over. I've had other random issues come up on holidays or weekends late at night with guests. Some of us are ok with making only 10-15% on our return with zero hassles. I realize I could make a buck more by dealing with all the headaches managing an out of state STR with technology, but my marriage and time with my family is worth more than that :)

    1Reply
  • Account Closed
    Financial Advisor · CA · Member since 2012 · 128 posts · 76 votes
    7y
    Originally posted by @John Morgan:
    Originally posted by @Account Closed:
    Originally posted by @John Morgan:

    My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

    Great area.  May we know the management company you use?

    I use Sunset Nightly Rentals. They do a fantastic job marketing it and taking care of my guests. It's worth the 30 or 35% fee they charge. STRs are so much more demanding. I'm not about to take on that task managing it from out of state. I have 6 STRs near me in Texas that I manage myself which is easy. But managing a STR our if state? No thanks!

    Hi John-

    I have had Branson in the back of my mind for quite a while.  Based on your kind recommendation, I called them and spoke with Barb.  She was great.  She and I will be keeping in touch and my plan is to buy in 1-2 years.  I am thinking I want to wait until after the election as I think there will be a "buying opportunity" then.  

    She discussed several condo complexes with me.  Very nice.  Thanks!

    0Reply
  • Cory Macculloch
    Professional · George Town, George Town · Member since 2016 · 25 posts · 3 votes
    7y

    @Aldo Balatti

    In the markets I have examined, traditional PMs don't make sense when examining SFH. Multi unit changed the math for me in some calculations.

    One exception to the rule above is syndicating with a PM who also is an LP and receives management fees as a percentage of profits (rather than typical PM fees). This is a structure that you may see if you co-invest alongside a RE fund.

    0Reply
  • Cory Macculloch
    Professional · George Town, George Town · Member since 2016 · 25 posts · 3 votes
    7y

    @Cory Macculloch - to clarify my post, as a fund co-investor you may get similar returns but expense structure would not be the same.

    0Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    7y

    Too much property management talk on this thread. The best part about STR is that you can easily self manage from anywhere in the world* Someone that works for you is in your home 2-3 times per week. Someone looking at it to make sure everything is in one piece. And it will be.

    Your PM isn’t going inside you home so why pay them. Just pay your cleaning person and be done with it.

    *of course depending on the market self management may be more difficult. If you’re trying to self manage a condo in a city you’ll likely be dealing with the police and angry neighbors. If you’re in a high traffic tourism area.... nothing to it.

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  • Rick BassettBusiness Member
    Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
    7y

    Some people (hosts) seem to manage everything remotely just fine but after doing this locally for several years I don't see how that's possible as crazy things tend to come up during guests visits that have to be dealt with quickly or they can have a serious impact on the critically needed 5-Star guest review. 

    The STR Hospitality business is 24/7/365. While I have good cleaning people, numerous handi-persons and licensed contractors, their availability is not 24/7/365 I have to pinch-hit on guest issues and repair problems when the support staff is unavailable.

    We often find problems, broken, stained, damaged & missing items, during turnovers that have to be dealt with quickly. Think about the timing of this scenario (there are many): current guest checks out at 11 am and next guest is arriving in at 3 pm, the cleaning person who starts cleaning at 11 am discovers a broken kitchen faucet or a running toilet around 11:45 am. If the problem is communicated quickly that gives just 3 hrs and 15 mins to solve it and perform clean up around it. That is very difficult to do in the best cases and even harder to do remotely.

    I'm an advocate a hybrid approach for remote ownership; using a local PM for the on the ground stuff but owning all of the guest interactions via the app. We intend to buy other STR's in other markets and will handle it this way.

    We do our own property management on our units and perform pm services for other hosts in Greater New Haven as their boots on the ground. Our pm rates vary based on the level of involvement that our host clients want to have.

    475-900-3100
    Bassett Property Management5108 Reviews
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    2Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    @Account Closed

    Barb is great. She will give you numbers on how many nights each unit gets rented out per year to give you a feel or trend for the kind of revenue each type of property brings in. I list my two bedroom cabin (Mayberry Lodge) as “pet friendly” to appeal to more people. I’ve never had an issue with dogs doing any damage. And during the summer months, people check out and they turn it so quick due to people checking in a few hours later. They list these rentals on several websites including a major one in Branson. And about 25% of my guests come from travel agents somehow. Sunset must have a good reputation with those travel agents. 

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