Short Term Rentals: Property/Booking Management Options
One of the most often asked questions in the Short Term & Vacation Rental Discussion forum on Bigger Pockets is from "newbies" who are investing in their first short term rental property and want to know what other investors are doing in regards to the management of the property and bookings. It is a good question and this forum is a great resource; there are a LOT of experienced STR owners and managers on Bigger Pockets who are willing to share their experiences and advice.
I worked for VRBO.com & Homeaway.com for 11+ years before I "retired" in 2013 so I am pretty familiar with the ins & outs of this industry. I managed properties for the owners of VRBO.com as well as the General Manager. In addition my husband & I have invested in six short term rental properties of our own over the years.
There are sevaral ways one can go about handling the management of a vacation rental property.
- 1. One can hire a full-service property manager
- A full-service property management company 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, guest relations, cleaning and maintenance. Rates for a full-service property manager range on average from 25% - 60% (depending on your area.)
- 2. One can hire a service that assists in the management of the bookings & communications with travelers.
- A service like this helps owners with all of the more time-consuming tasks of managing a short term rental property. Things like: maintaining all of the advertisement(s) of their vacation rental property as well as handling all communications with travelers before, during & after their stay, handling payment schedules, sending rental agreements, communicating with housekeeping/maintenance staff and following up with the guests to request that they submit a review of their stay at the property. The professional and comprehensive handling of each reservation is critical to maximize owners' investments in their vacation rental businesses.
- In this scenario however, the actual management & maintenance of the property is up to the property owner, including the hiring of local housekeeping & maintenance contacts.
- Typically the fee for this type of service is not as expensive as a full-service property manager and is well worth the benefit of the extra time these clients will have for the things that are more important to them.
- 3. One can handle all aspects of their vacation rental property themselves ("by owner").
- A few people have mentioned on this forum that self-managing is the easy part, and that is true. It is not difficult. What it is, though, is time-consuming. Depending on how busy you are and how much your time is worth self-managing might be more of a time investment than you are comfortable with.
- I've seen some people post on the forum that they've created practically an automated process to handle their bookings. While productivity tools and automation are helpful, in my experience the most successful booking experiences happen when guests feel a connection with their hosts. That personal connection is difficult to establish if the process is fully automated.
- This option is the most lucrative of the three since the owner is doing all of the work himself/herself and not paying a commission to a booking service or full-service property management company.
Whatever option one chooses will be determined by the desired goal and bottom line and amount of time the owner wishes to invest in the management of their STR property and bookings.
The income generated by short term rental properties can be a great return on your investment depending on the purchase price of the property, the financing and the expenses involved, but one of the most important decisions to be made is how to handle the management of the property and the bookings. I hope this article helps clarify some of those options.
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