Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
6y
Take the 30% off your revenue and you are left with the profit you would probably make with a LTR.
If you're going to run a STR, you should be the PM. I've got 83 beds in 23 doors. The only person I pay is the plumber when he has to run a roto-rooter. The only reason I pay for this service is that I don't like feces on my hands. Running a roto-rooter is a shippy job.
@Amy Canfield I totally understand about not wanting to self manage. Ever since I had to call ATT to deal with a guest’s downed Wifi, at 4 in the morning in a hotel bathroom (to not disturb my sleeping family) while on vacation in Hawaii, I decided self-management was not for me. I still liked the Airbnb model though, so I hired a property manager and a designer to furnish my next property.
However, 30% is ridiculously high. At those numbers, it would make more sense and be less risk for you to just find an AirBnb arbitrager. You would charge a higher than LTR rent/month and they would pay for and deal with furnishing the property, all the utilities and repairs, and all the interactions with the guests. This is even less of a time and financial commitment from you than a property manager since you wouldn’t have to deal with the added time and expense of furnishing the property.
Or you could Not answer the home at 4am. That’s my business model. The WiFi can wait until business hours.
If you set the precedent that you’re available at 4am for rich people problems..... you’ll have to answer the phone at 4am. If guests are aware you’re not going to answer at 4am before they book.... you’re good to go!
There’s a section on all platform:
How do you communicate with guests? Mine says “We are available via Airbnb messenger during normal business hours. We are not available via phone or text.” This system works for ME. If you’re a sweet old lady that bakes cookies for all of your guests.... probably ok to answer the phone. I am NOT a customer service kind of guy.
You didn’t need a PM you needed a tweak to your system.
Think of it this way.... really the only thing that matters at 2am is if the house is on fire or someone died. Unless you’re a fireman that’s on duty in that jurisdiction -or an ambulance driver .... they’ve wasted 2 precious minutes calling the wrong person.
If you folks who do the PM yourself, instead were forced to outsource for some reason - what do you think a reasonable fee is that would get you good management? maybe not limited to a % but a flat fee? % of net cash flow?
$20-$60 per event. It depends on the scope of the event. Unlocking a door, change the fill valve in a toilet, replace a ballast in a fluorescent light, etc. $20. Replacing a motor other component in an appliance or system, $60.
@Jean H. exactly! That's what attracts me most to a property manager - I don't want to deal with the middle of the night headaches. Managing the bookings, finding cleaning people, decorating (as long as I hire someone...I have zero skills) I can handle. Like @Andy Becker was inquiring (kind of), I wonder what would be a reasonable fee for partial property management...does that even exist? Maybe I can make it exist...pay someone a flat fee per month to be on call. They would get the money no matter what, I would get piece of mind. Anyone have a relationship like this?
For $4/hr you can have a team of people in Cambodia who competently handle all of this 24/7. It really isn’t that difficult. And you’re only paying for the hours they work. Some days they’re busy handling a bunch of things for me over a 3 hour period (woohoo, $12 spent!), sometimes I go a few days without needing them to do anything.
@Jean H. exactly! That's what attracts me most to a property manager - I don't want to deal with the middle of the night headaches. Managing the bookings, finding cleaning people, decorating (as long as I hire someone...I have zero skills) I can handle. Like @Andy Becker was inquiring (kind of), I wonder what would be a reasonable fee for partial property management...does that even exist? Maybe I can make it exist...pay someone a flat fee per month to be on call. They would get the money no matter what, I would get piece of mind. Anyone have a relationship like this?
TOOOOTALLY with you on the lack of decorating skills. That’s why I have an amazing interior designer in the Middle East for $10/hr.
My handyman or cleaners take pics, videos & measurements of my rooms. Then i email those to my designer who puts together mockups & 3D renderings for me, complete with links to Benjamin moore paint colors, links to the products on Wayfair, etc. I hit the add to cart button & ship everything to my handyman or cleaners.
I send my handyman and/or cleaners images of the renderings & tell them “I ordered you a bunch of stuff - make the room look like this please & send me some updated pics when its complete”
This is how I get around my lack of design skills without overpaying. Play chess not checkers
Rental Property Investor · Miami, FL · Member since 2016 · 173 posts · 206 votes
6y
@Lucas Carl Just to clarify, while it was 4am in Hawaii, it was 10am on a weekday in Florida where my property was, so the guest was perfectly reasonable to expect it to be taken care at that time.
I agree that I probably need to to tweak my system, but setting up/tweaking those systems do take time and energy that I’d prefer to spend elsewhere—e.g. being a mom or buying and renovating property. I’m more than happy to pay a little something to piggyback on somebody else’s system, as long as I’m still making money.
Dumb question but what would you expect to pay a long term rental PM? And if there is a difference in compensation, why? Is STR PM that much easier than LTR PM? Are you/someone else doing other tasks a LTR PM would normally do?
Dumb question but what would you expect to pay a long term rental PM? And if there is a difference in compensation, why? Is STR PM that much easier than LTR PM? Are you/someone else doing other tasks a LTR PM would normally do?
STR is way more work but totally dft ballgames bc with LTR you're typically screening tenants in-person thus LTR PMs are typically local & thus you have to pay them local rates. With STR, you don't need your PMs to do anything local (cleaners & handyman do that) so you can leverage this to have PMs anywhere on the planet especially very low cost locales.
Considering PM can be a very large cost (if you let it be), I refuse to have a local PM & by local, I mean within 10,000 miles
Des Moines, IA · Member since 2016 · 54 posts · 25 votes
6y
@Amy Canfield
I'm working on a STR deal now, and have budgeted 25% for a local property manager to market, book, clean, and maintain. In this case, they're not just managing and arranging the work, they're doing the work themselves.
I'm working on a STR deal now, and have budgeted 25% for a local property manager to market, book, clean, and maintain. In this case, they're not just managing and arranging the work, they're doing the work themselves.
So that 25% includes all cleaning fees? You might wanna double check on that
I'm working on a STR deal now, and have budgeted 25% for a local property manager to market, book, clean, and maintain. In this case, they're not just managing and arranging the work, they're doing the work themselves.
So that 25% includes all cleaning fees? You might wanna double check on that
Benefits of investing in the rural Midwest. Taxes suck, though.
So I get it that you *can* outsource PM to some VAs in the Phillipines for cheap. I have had mixed success doing that in other lines of work. When I think I my favorite Airbnb experiences however it was where there was a local person who knew the area and was around to help restart a pilot light or suggest a restaurant. I have a hard time seeing how you can do that with somebody from thousands a miles of away easily. David Greene talks in his books a lot about leveraging PMs in his books for growing a long distance rental portfolio. Granted he is not focused on STR. I am guessing their are two extremes - local+"hands-on"+concierge - which can be pricey but hopefully allows you to charge a premium; and more price competitive but without the guest hand-holding?
So I get it that you *can* outsource PM to some VAs in the Phillipines for cheap. I have had mixed success doing that in other lines of work. When I think I my favorite Airbnb experiences however it was where there was a local person who knew the area and was around to help restart a pilot light or suggest a restaurant. I have a hard time seeing how you can do that with somebody from thousands a miles of away easily. David Greene talks in his books a lot about leveraging PMs in his books for growing a long distance rental portfolio. Granted he is not focused on STR. I am guessing their are two extremes - local+"hands-on"+concierge - which can be pricey but hopefully allows you to charge a premium; and more price competitive but without the guest hand-holding?
Llllllmfaaaaoooooo.... you sound like my mom... “But Marrrrkkkkk, these people you hire in Cambodia..... how will they be able to recommend a local restaurant to your guests?!?!”
As if people in Cambodia don’t know how to use Yelp! 😆
I don’t know what to tell ya, man. My places rent for $2,000 per wknd & they stay booked year-round. But you do you - run your business the way that makes you the most comfortable
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
6y
@Amy Canfield
I pay 30% to a property management for my vacation cabin rental in Branson, MO. It’s worth it to me. Been doing this for 5 years. It gets hectic with guests checking in and out on the same day during the summer. They do a great job getting it cleaned and turned on time. They’re available 24/7 and have dealt with all kinds of maintenance issues at my place from squirrels in the attic chewing up wires causing the power to go out on thanksgiving to HVACs going out on weekend nights to my roof leaking the day my guests who booked it for two weeks checked in. I don’t care to deal with all of this. Meanwhile, guests leave me great reviews all the time online with several of them keep returning. All it takes is a couple bad reviews from bad service and bookings will drop off.
They do everything. All I do is pay taxes, insurance and utilities. They wire me money by the 15th of the month and I almost never hear from them. They give me the option to re stock missing kitchen items each year when they do inventory, but I elect to pay them a 25% service fee to replace those missing items for me every year. If something breaks down and it costs more than $500 they call me and ask if I want to get a second opinion or estimate. I just don't want to deal with the headaches of dealing with a STR. There are a lot of moving parts involved and that's not for me. I still make about 10% cash on cash with my investment. And get to stay for free there whenever we want so that's cool. But most people would probably rather be more hands on and go for the home run. I'm more of a base hit kind of investor. I self manage all my SFRs that are all located within 30 min of my house. That's super easy. But out of state STRs? No thanks!
Rental Property Investor · Wrentham, MA · Member since 2019 · 137 posts · 104 votes
6y
@Avery Carl I recently received a quote of 30% from Vacassa. When I picked myself off of the floor I said thank you no thank you. I did get a quote from a very popular local person of 18% which felt a little more reasonable. In the end I'll do it myself for the first year to get it up and running and if I can get the thing to cashflow and learn a ton I may turn it over to a PM while I play golf! Thanks for all of you guidance on these forums you have been extremely helpful!
Rental Property Investor · Miami, FL · Member since 2018 · 110 posts · 113 votes
6y
Hi Amy,
is this for AIRBNB or long tern rental?
Airbnb- I think you could shop around and get 15-20%. I personally charge my clients 20% if the property has never been on Airbnb and 15-18% if it's established or "superhost" status. I charge a flat fee for interior design - $250+ depending on size. But again, this works for the investor because it is a one time charge rather than a 10% additional charge per month!
Long term- This is crazy!!! LOL i would not pay more than 10% and a flat fee if they're doing additional services.
You have to do your numbers on this. By the time you take of 20-30% of revenue you may find you would have been better off staying with long term. I have 11 properties and am always looking at the numbers between Long term and short term to make sure they make sense.
I pay $99 flat fee per property for my management needs. Been with them for 2 years and manage properties in 3 states
$99/mon? For STR management?! What do they actually do for that? Mine are in a third world country so for $4/hr they'll set door codes, message (or call) guests, schedule cleaners, adjust the thermostat, monitor my cameras, call a plumber, etc.
I too often spend around $99/mon per property but I can’t imagine you’d get the same level of quality & service that I do for that $99/mon price domestically