All Forum Posts by: Brad Larsen

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@Nnene Mbonu

@Timothy Church Hey Timothy - great advice.  I had a good long conversation with a colleague last night about this.  We are thinking we can create this as another program for management on top of the ones we already have existing.  

"We Manage AirBnB and VRBO Rental Homes"

1) Charges:  TBD

2) Services:  Full Management, Accounting, Maintenance, Advertising, Turnovers, Leasing, Inspections

3) Fulfillment:  Design and dedicate one PM in the office to handle these.  

Pitfalls: Turnover and HOA's. If the city or HOA gets pissy with the whole thing, it could rain down on us as the big and easy target.

Full Disclosure:  As we start to develop this, we will learn what all the numbers end up looking like for our market.  In a lot of cases, I would make the assumption that making a home into an AirBnB/VRBO rental versus a long term rental are near the same.  You have to factor in furniture, wear and tear, and all kinds of other factors.  Point being here is that we would tell everyone about all of the issues, and pitfalls UP FRONT in the effort to show them traditional renting may be better for them.  It takes a certain home and investor to put up with the constant worry of owning a home like this.  

My colleague mentioned several best practices I remembered.  If you have to furnish the home for the owner on their behalf - get an open checkbook and expect $10,000+.  Also, they are using the Rently system with their electronic locks to perfection.  We would establish an account with them just for those as we use Tenant Turner for all of the traditional homes.  Also, they take the income received in to THEIR account with AirBnB - so the flow of money comes into the management company accounts - they put those funds into Appfolio - and pay the owner with full accounting run through their software which would include a 1099 at year end.  (Genius!!!).  

Thank you Tracy Streich in Oklahoma!!!

With the upward trending of AirBNB and VRBO, I am looking into finding out more about how a management company can turn the management of those types of units, and those types of investors, into a viable business model.  

We currently manage 750+ single family units in the San Antonio, TX market and 200+ units in West Palm Beach, FL.  We have created numerous management plans that go from top to bottom - but focused on the traditional owner of 1+ single family homes renting them out to long term tenants.  If we can figure out and perfect the flow of operations (and the pitfalls) - we can possibly create a program to manage units designated for AirBnB and VRBO.  

Questions:

1) What would a management company charge an owner / investor to manage the home for them?

2) Finding a long term monthly estimate in our market is fairly easy, but what pricing model do you use for a unit like AirBnB and VRBO where the turnover is constant?  In other words, what mark up is expected?  (Assumption is you price it in line with other AirBnB's) 

EXAMPLE:  If a home goes for $1,500 per month as a "regular" rental ($50 / day) - what should that be for a weekend rental rate per day? 

3) The staffing overhead to manage such constant turnover of units has to be tremendous.  When my family and I stayed in a VRBO two years ago in Ruidoso, NM - the company there was johnny on the spot awesome with service.  That level of service eats up a lot of time, and is very stressful long term for the company.  Constant churn = constant ways to screw up.  If outsourced with internal staffing - expensive!  

EXAMPLE 2:  Your reliable maid service of several years fails to show up to clean a quick turnover rental home.  New VRBO resident shows up to a dirty unit.  Uh oh!  Owner gets wind - fires management company.  Imagine renting a home out 5 times a month for 3 days each - for 12 months.  That is 60 turnovers!!!  Clearly this would cause a lot of stress on the staff.

Would love to hear some dialogue or be pointed in the right direction as to where this concept of managing VRBO's and AirBnB rentals for 3rd party owners is working - and how it works! 

Take care! 

@Jimmy L.  Hello Jimmy!  Sent you a reply to your PM.  With our large inventory of 750+ homes, we have numerous "Package" deals.  These are off market pocket listings where the owners would like to sell, but they have a long term tenant in the home with a year or two left on their lease.  These opportunities are there with us once we learn what formula you may be looking for.  As mentioned, give Danny a call - our buyer's agent specialist - and he can assist.  Take care! 

We would recommend the WistarGroup.  I personally the owners Jeremy and Gwenn and have been very impressed with their organization.  WistarGroup.com  

Let them know we recommended them! 

@Dave Crussel  Dave - for those of us in the real world where sign advertising is still needed / requested by those we manage homes for....giving the client what they want.....we have used Oakley Signs out of Florida for near 10 years.  Google "Oakley Signs" and you should pick them up.  They design, and deliver....best prices I have yet to find and top quality.

Here is a pro tip:  Spend real money on getting top quality signs.  DO NOT do the cheap plastic signs.  You are what you put in someone's yard.  

Good luck out there! 

@Christian Swalm  We manage 750+/- units right now and growing.  Appfolio has it's ups and downs.  Their closed API and arrogance is really irritating.  However, the product they put out is the best solution on the market which is why they have the lion share of the market for property managers.  

Good luck out there! 

@Bradley Chiakas

1) You 100% need a RE License in Texas to conduct fee based Property Management.

2) You need insurance.  All kinds.  

3) Set up separate accounting

4) You don't really need traditional employees like you think.  You can outsource everything and pay a fee.  Example:  Pay $"X" for someone to go put a sign in a yard and take pictures.  Pay them to pick up the sign.  Etc....  Break down the components of your life cycle of leasing and management and there is an outsourced solution for everything.  

Good luck out there! 

@Oliver Posewitz@Andrew Johnson

What you have presented here is PROJECT Management, not Property Management concerns.  You have 6 total units that you want large plumbing projects done.  You are using your Property Manager like a General Contractor and asking them to get you numerous bids about a project that will most likely be $20,000 or more.  How much is the PM making from this PROJECT you are forcing on them?   

My recommendation is YOU take this on.  This is probably something your PM agreed to because they did not want to tell you "NO".  

Here's a good article on working with a property manager that may help:

https://www.biggerpockets.com/forums/52/topics/402...

Good luck out there!

@Carrie A.

NO on the Home Warranty.  I could rail on this for a few thousand words, all would echo what is said above this post.  

FYI:  A Home Warranty being part of a real estate purchase through traditional Realtor workings could be part of their requirements for their Errors and Omissions insurance.

Some E/O policies will only waive a deductible if certain conditions are met such as several required forms - AND - a Home Warranty in the deal.  

It's sort of a marketing ploy, but more a company policy of putting these as standard fare in a transaction.

Outside of the "freebie" you have from the purchase - do not renew and do not ask your property manager to conduct maintenance through the red-tape BS of using a home warranty.  Your tenants and manager will hate you.