Hello, I am considering a short term rental investment in Atlanta. Any recommendations for short term rental property managers who can give me the pricing breakdown so I can better understand the income vs mortgage plus management ratio better?
Hi Amina, There may be but I'm suspecting there is no resources that packages up all the numbers for you. Just my views, you as the investor need to educate yourself on the numbers so you have the facts, not dressed up numbers someone wanbts ytou to beleive.
Go to airbnb.com and look at rents/occupancy. Then go to zillow.com and look at what those homes sell for to buy. Then bankrate.com for investor loan interest rates and % LTV. And punch these numbers yourself.
you can find STR groups anywhere in meetup.org. The REIA's, google city name (or state) plus REIA. I'm a member of gareia and there's a few STR operators in this reia.
I use a "super host" I met in my REIA to manage my STR and gladly pay 20% of the gross for him to manage. Fees can be 25% on down.its more expensive to pay an STR manager then you might think... Lower fee'ed managers may not mean better management, so be careful.
Bottom line and a hard and fast piece of advice I give; make sure your mortgage PITI is less then 12 mo rents!!!! As a last resort you can rent the house. Please (please) don't buy some mcMansion with astronomical PITI that only cash flows as an Airbnb at 80% occupancy. That is a receipe for disaster. IE early 2020 when travel went to zero, all those small time Airbnb operators with high PITIT payments had to cover those loans out of pocket. Some went bust! Some where fire-sale sold. Its "look before you jump" re this advice; it must cash flow as a rental as a back stop.
Please take care, all is not roses in STR land. Its possible, not a guarrantee you'll make a good living. Chech airbnb.com for Atlanta. 1000's of doors... I honestly don't know how they all get guests? You'll need to take a year, join many groups found in meetup.org and learn what works and what is high risk. Then; best of luck! :)
Thank you so much @Curt Smith . This is a very valuable advice. I will follow your suggestions to determine the right ratio for me and finding a good STR property manager. Really appreciate your insights. 🙏
I can add that there is a Short Term specific forum right here on BP. I've learned a ton from reading past forum posts but I will warn you that the majority of those on the STR forum lean towards self-managing. I self-manage 3 STRs along with 2 LTRs along with my full time W2. At first I did it out of necessity as property managers in my area were charging in the range of 25-35% of gross rents and at those fees, it cut drastically into profits.
Now that I've been self-managing for a little over 2 years, I've created systems to make things very smooth and I'm so glad I made that decision. I feel pretty comfortable now being able to scale to probably 8-10 properties with the systems I've got in place.
Good luck and as @Curt Smith mentioned...do your homework and own investigating. Call a few STR managers and ask what they charge and what they give you for that fee. In some places, even STR margins may be thin, so you'll want to factor your cashflow after PM fees. You may find yourself making as much as a LTR and with LTR, you're doing much less work.
Thank you very much for the detailed response. This is very helpful!