Crystal Coast Vacation Rental Show

Today we’re going to look at one of the most enduring questions people have when getting into rentals, and specifically the Short Term Rental (STR) business. “Should I manage things myself or hire a property manager?”

We’re going to look at pros and cons of using a property manager and a couple things to think about that may not fall into either category, but could shade you towards one method or the other.

We are not referring to online booking platforms such as AirBnB or VRBO when we discuss property management. A property manager is going to be a full service agent who will act as the intermediary between you and the guest. In fact, while using a property manager you should have no need to have contact with the guest at all. All routine tasks should be handled by your property manager without input from you. They should handle bookings, check-ins, cleanings, and minor maintenance. They should also provide monthly statements and year end reports and tax documents.

Using a property manager for a short-term rental can offer significant benefits, but it also comes with potential drawbacks. Here’s a breakdown of some key pros and cons:

Pros:

• Time Savings:
  • Property managers handle tasks like guest communication, bookings, cleaning, and maintenance, freeing up your time. This is particularly useful if you’re a part time STR landlord. Many people have demanding full-time jobs that reduce their available hours.
• Expertise:
  • They have experience in pricing, marketing, and dealing with guest issues, potentially maximizing your rental income. 
  • They often have established networks of reliable cleaners, maintenance workers, and other service providers. If you own a property in an area that you don’t live in full time, this is a huge item. Knowing the status of service providers in an urgent situation is critical.
  • They are also knowledgeable of local laws and regulations. They typically will keep current with any proposed ordinances, often acting as a lobbyist for the industry.
• Guest Management:
  • They handle guest screening, check-ins, and check-outs, ensuring a smooth experience for both you and your guests.
  • They handle guest communications and problems that may arise, often having full-time staff for such things. Many have 24 hour on-call staff.
• Increased Occupancy:
  • Property managers often have marketing strategies and established platforms to attract more bookings. 
• Peace of Mind:
  • Especially if you live far from your rental, a property manager provides peace of mind by handling emergencies and day-to-day operations. We, living in the midwest, came up against Hurricane Florence just weeks after getting our property on the market. Having “boots on the ground” in the first days after the storm was critical.

Cons:

• Cost:
  • Property management fees can significantly reduce your profit margins. This is probably people’s largest concern. When I discuss this in person with people, it’s almost always the first question. Whether this is a full-time business or your goal is to offset expenses, it does come down to the money.
• Loss of Control:
  • You may have less control over how your property is managed and the guest experience. Some personal touch will be lost.
• Potential for Miscommunication:
  • There’s a possibility of miscommunication or disagreements with the property manager, or worse, the guest. If there is a problem, it’s your property that will lose a return guest. And you probably won’t even know.
• Varied Quality of Service:
  • The quality of property management services can vary, so it’s crucial to choose a reputable company. Talk to other owners in the area. We like to rent through the company prior to them even knowing we’re interested. This will be the face of your property. If you don’t like the service, others won’t either.
• Less Personalization:
  • Using a property management company can sometimes cause a less personal experience for your renters. People love the idea of “renting from a local couple.” 

Wild cards:

• Availability:
  • Is professional STR management even available where you are purchasing? Having someone say, “we could probably do that” is not the same as “we do that.” The difference between long term rental management and short term rental management is large. Many companies do both well, but if you’re going to be someone’s test case, make sure you’re aware of it. Sometimes it’s not even an option.
• Local Brand:
  • This is diminished a bit in the world of the big online booking platforms, but some areas have a certain brand that becomes “the one.” Look around the area and see who manages the bulk of the houses. Look at the quality of the rentals. Who has the ones in your immediate area? Who has the ones you want to stay in?

What should I do? Like almost anything in life, this comes down to time, skills, and money. Any lacking in one must be made up by the others. Another consideration is, what are your goals? If you are at a point where you just want to see that deposit every month, the answer is clear. But it won’t be that easy. However, you can get closer. 

Whatever you choose, your success in this arena is not limited by which path you choose. I’ve known extremely successful people using both methods, including one man who handled everything, including doing the booking and cleaning himself. People loved the personal touch and almost all of his bookings were repeat. And he had an impressive average daily rate. I’ve also met people who have expanded their annual gross to seven figures by concentrating on acquisition while leaving operations to others.

The bottom line is that you will need to make this decision for yourself based upon your situation and your goals. What do we do? We use local management. When we purchased the properties, we were 1000 miles away and we needed the guidance and local resources. Now that we are local we appreciate having the expertise and the manpower to make things go smoothly. We are also slowly moving towards more travel and we want to have the freedom to do that.

In an upcoming post, we will take a closer look at choosing a management company and working with them. If you have questions or comments, add them below.

We will be at the Carteret Chamber of Commerce Business After Hours Expo April 29 at the Crystal Coast Civic Center. We will be promoting our exhibition spaces and are planning some great giveaways and promotions. See you there!

As always, if you are interested in the Vacation Rental industry or are already involved, we encourage you to join us at the Crystal Coast Vacation Rental Show October 18 and 19 at the Crystal Coast Civic Center. Subscribe and follow our social media links above and below to stay on top of what’s coming next.