Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
Hello - I have two STRs in the Pigeon Forge/Gatlingburg area. I have had one for two years and the second I purchased this year. The first one is a 4bd/4bath log home and it is with a well know local property manager. They take 30%. However the property is grossing 70k+ every year and it did that for two years prior to when I purchased. My mortgage payment on it is 1,900 a month. My PM tells me that in that area those results are simply not possible for a “do it yourself approach” is this true? The second property will do about 45k a year for a 2bd/2ba and the same PM. That mortgage payment is 965 a month.
Hello - I have two STRs in the Pigeon Forge/Gatlingburg area. I have had one for two years and the second I purchased this year. The first one is a 4bd/4bath log home and it is with a well know local property manager. They take 30%. However the property is grossing 70k+ every year and it did that for two years prior to when I purchased. My mortgage payment on it is 1,900 a month. My PM tells me that in that area those results are simply not possible for a “do it yourself approach” is this true? The second property will do about 45k a year for a 2bd/2ba and the same PM. That mortgage payment is 965 a month.
Thank you for any insights!
Yeah I mean, if I was making 30% I'd tell you that you couldn't do it too. I've heard giving 15-16% but not 30%. That's what I'd expect to split with a partner and if that was the case my partner would be the manager.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
6y
Hey @Alan Ford. I seriously doubt that what they are saying is true. Just wait for Lucas and Avery Carl to chime in and they will tell you the same thing.
The PM wants you to stay so....
Of course it will take more work but that 30 percent ends up in your pocket.
Hello - I have two STRs in the Pigeon Forge/Gatlingburg area. I have had one for two years and the second I purchased this year. The first one is a 4bd/4bath log home and it is with a well know local property manager. They take 30%. However the property is grossing 70k+ every year and it did that for two years prior to when I purchased. My mortgage payment on it is 1,900 a month. My PM tells me that in that area those results are simply not possible for a “do it yourself approach” is this true? The second property will do about 45k a year for a 2bd/2ba and the same PM. That mortgage payment is 965 a month.
Thank you for any insights!
Yeah I mean, if I was making 30% I'd tell you that you couldn't do it too. I've heard giving 15-16% but not 30%. That's what I'd expect to split with a partner and if that was the case my partner would be the manager.
Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
6y
Wow - I had no idea, I mean I am happy with the money I have been making on them, but had no idea I might be losing out on tons of revenue. Then again, I love not having to worry about anything at all...
Wow - I had no idea, I mean I am happy with the money I have been making on them, but had no idea I might be losing out on tons of revenue. Then again, I love not having to worry about anything at all...
Looking forward to learning more!
Yeah man, there are plenty of paths to the same destination. Some are better than others. However, no one should ever tell you that you can't do it. You could consider hiring a maid and a co-host to reduce your costs. But 30% is ridiculous, you're getting the short end of the stick.
Wow - I had no idea, I mean I am happy with the money I have been making on them, but had no idea I might be losing out on tons of revenue. Then again, I love not having to worry about anything at all...
Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
6y
Hey @Alan Ford Like others have said, the PM as a vested interest in you staying; they're losing cabins hand over fist to self-managers who can make AT LEAST as much gross revenue as the PM does! Myself, @Avery Carl@Luke Carl and many others on this forum self-manage our properties in the Smokies.
The numbers your properties are doing with the PM are average. There's plenty of room for growth there.
Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
6y
@Alan Ford I have been on a conference call with the owner of one of the bigger cabin management companies before as he tried to pitch my client on his services. (At 30-40%) He said several times that it’s not possible to self manage. And that you “won’t make any money with Airbnb.” He didn’t realize that my client and myself both self manage all of our respective cabins through Airbnb and VRBO. The whole conversation gave me feelings of second hand embarrassment. Self management in this market is 100% doable. I can think of a lot better things I can spend 30% of my gross on, like more investment properties. It’s not necessary to pay someone tens of thousands of dollars for a gig that is the equivalent of answering a few texts a day.
@Julie McCoy self managed her 3 cabins from LA before she moved here. And most of the owners you’ll find here do the same from wherever they live, and everyone is more than happy to share tips and tricks!
Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
6y
@Avery Carl thank you. I sent you a contact request, partly to talk more in detail on this but mainly for your services in my next property in the area that I am looking to buy now.
For the the rest — @Nick Rutkowskimentions a co-host? Can someone explain that? Is there a middle ground where I can have someone do the bookings, price changing, administrative tasks, and they get paid a salary or percentage but I still end up not paying PM levels? I am sure I could Learn to do this myself but I am a busy single dad with a very demanding 60 hour a week job already. I would be absolutely thrilled to take that 30% number down lower but still pay for help.
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
6y
The only person making money is the PM. I self manage 23 STRs with 83 beds in my town. The Ayatolla of Jack and Cola, The Man with the Scorpion Tattoo will come along and give advice on self managing.
@Avery Carl thank you. I sent you a contact request, partly to talk more in detail on this but mainly for your services in my next property in the area that I am looking to buy now.
For the the rest — @Nick Rutkowskimentions a co-host? Can someone explain that? Is there a middle ground where I can have someone do the bookings, price changing, administrative tasks, and they get paid a salary or percentage but I still end up not paying PM levels? I am sure I could Learn to do this myself but I am a busy single dad with a very demanding 60 hour a week job already. I would be absolutely thrilled to take that 30% number down lower but still pay for help.
There’s absolutely a way. Like you, I work long hours so I outsource my PM to a team of virtual assts in Asia for $4/hr - they’re amazing & I make a ton of 💰💰💰. Google “virtual assistant” - there’s plenty with Airbnb experience now that it’s exploded worldwide.
Remember: Property managers are simply schedulers. Don’t let a scheduler take your profits. Either self-manage like many on here do, or hire an inexpensive offshore PM who works US hours & speaks eloquent English. Mine can set door codes, message (or call) guests, schedule cleaners, adjust the thermostat, monitor my cameras, & call a plumber just as easily as a local PM can, for 1% of the cost. 🎤 ⬇️
@Mark Miles wow! That is amazing. So they get access to your VRBO etc. portal? How do you stop them from accessing your banking information?
I am really glad I found this forum.
Yeah nowadays most web sites are sophisticated enough to let you add helpers & restrict their access. All part of the gig economy. I offshore PM, bookkeeping, interior design, etc.
In Quickbooks, for example, you can add someone as a bookkeeper so they can reconcile your accounts but they can’t access payroll, etc. There was some thread on here the other day about people spending their wknds doing their own bookkeeping. Makes no sense to me - my time is more valuable than that - we’re CEOs not bookkeepers
This whole gig economy thing is a win, win - I get access to inexpensive labor & people in 3rd world countries can now afford to feed their kids. Win win!
That’s basically what that book 4-hour workweek was about. I think. Never read it, just kinda figured this stuff out on my own
Hi Alan, I am a professional STR property manager in the San Francisco Bay Area and I also manage my own STR rentals remotely that are located in Sedona, AZ so I'll share my perspective:
You can absolutely manage your properties remotely but it does require "boots on the ground" in Pigeon Forge/Gatlingburg area. Normally this is your cleaning team. So if you can find reliable and detail oriented cleaners in the area that work for you directly then I would say yes you can absolutely self-manage.
Supplies for the vacation rental you can Amazon directly to the house and just make sure guests know to set aside packages for the cleaners to open them. Alternatively you can Amazon supplies to your cleaner's residence if they will allow that (most will).
The work-load for you when you self manage is primarily responding to guest inquiries, managing pricing, managing vacancies, and scheduling cleaners.
In short, if you have the time to deal with all of the guest communication and managing the units pricing and cleaning schedule then I would say YES self manage!
Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
6y
@Carlos Carbajal Thank you.
I suppose ultimately it’s a question about traffic. I know I can do it. But will I lose my revenue that comes from that repeat guests on the PM Website, (I have quite a few). Next point is unverified - but PM indicates the traffic on his site is very high compared to some of the VRBO sites etc. I will say basic google searches definitely shows his site pretty predominantly all over the results.
He also does a lot of promotional type stuff, “one free day if you stay five days type stuff” pay for six and get 7th free etc.
On the flip side - it costs me 30%.
I could stand to lose a few reservations if it meant making more money overall.
I would definitely be doing it with some type of help from a VA or co-host etc.
You also asked about "co-hosting". This is a feature that AirBnB pioneered and as far as I know they are the only ones that support it directly. VRBO does not support co-hosting at this time (to my knowledge).
Co-hosting is where you share the workload of guest communication, pricing, etc with someone else. You give this person permission in your AirBnB account to access the properties you specify. They can do most of the things you can do in managing the property and they can see all the guests personal info (phone number, name etc). Co-hosts can also leave reviews.
The co-host does not have access to your payment nor payout settings so this helps from a fraud prevention POV. AirBnB used to allow you to split the payments between you and the co-host (ie 15% to the co-host, 85% to you) but they shut it off due to too much fraud.
If you want to go the more professional route and have co-hosting ability across different websites you'll have to invest in a 3rd party Vacation Rental Management platform like iGMS, VREASY or Guesty. These usually make sense when you have multiple units.
If you only have 2 or 3 units and you don't have a full time job then I recommend self-managing your vacation rentals contingent on being able to hire a good cleaner local to Pigeon Forge/Gatlingburg.
Can the PM do 30% more in gross revenue than you can do yourself? That's possible but personally I think it might be unlikely unless he is able to book a lot of business direct on his/her website.
30% is a steep fee. Thats 30% of the gross revenue but a much higher percentage of your profits.
I would try to do it on your own at first. You can always come to back to the PM later if you feel like they can make you more money.
Another option if you have multiple properties is let the PM manage one of them and you self-manage the others so you can compare. But I wouldn't go down that path if the PM requires long term commitment.
Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
6y
@Carlos Carbajal - appreciate the help.
A few points - 100% of all the traffic and all my reservations (the results noted in my first post) have come solely from his site. He doesn’t do anything with VRBO, AIRBNB etc.
I have a very busy full time job and am a single parent full time.
That software solution or company you mentioned sounds interesting.
Property Manager · Aurora, CO · Member since 2014 · 221 posts · 210 votes
6y
If using an off-shore Virtual Assistant makes you a little uneasy, consider a Marketing & Booking service to manage your listings, inquiries, bookings, guest communications, communications with housekeepers, tracking payments, etc. It is the niche between doing it all yourself or having a full-service property management company do it all for
Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
6y
Don't do co-hosting. Don't do a property manager. Don't do something like evolve or vacasa. They are all leeches. They are not needed and they suck up too much of the gross. Evolve hides it by billing your guests also often without your knowledge.
there are plenty of Property Management Systems (smoobu, ownerreservations, etc) that will automate things like bookings from VRBO or booking.com or Airbnb or FlipKey. There are Dynamic pricing algorithms such as real house or pricelabs that will let you optimize pricing and minimum days for each day. There are locks that will work with the property management systems to let them in a check in time. etc etc.
Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes
6y
@Ken Latchers I appreciate the insight and references. Here is my biggest concern - 100% of my rentals all come from my PM’s own site (zero VRBO etc) I also have many return guests. It sounds like I could potentially make more money, but the big assumption I would be making is that the renters will find me and I will get just as many bookings. Might be worth rolling the dice.