Since starting my hosting journey on Airbnb and VRBO, I have fully managed my units myself. Even with 400 miles separating me from my furthest location, I have managed to manage the operations just fine by myself. As I continue to grow and look for my next property, however, I am beginning to think about business sustainability and preservation of my bandwidth and mental energy. After all, I am still trying to excel at my day job at the same time. The problem is, most traditional property management companies have never touched the world of short-term rentals in their portfolios. In this post I’ll write through the benefits and possibilities of utilizing a PM company for your STR and how I might structure the agreement.
The timing of my growing pains is actually pretty convenient; I am in the process of switching my property management company for a long-term-rented triplex. While interviewing the new company and beginning the transition, I started to have the conversation with them about helping me out with my Airbnb and VRBO units, 2 of which are in the same city as the triplex. Specifically, I wanted help with 3 things:
- Automating the seasonal work: Cleaning gutters, changing furnace filters, mowing grass, and shoveling snow. The first 2 are items I travel 3 hours for to do myself twice a year and the last 2 are ones I have to text a guy in the neighborhood about doing, which requires timing and guesswork on my part.
- Guest maintenance contact: Much of the stress I feel with hosting has nothing to do with actual work. It’s just the worry that a guest might contact me at any time with an issue. Silly, I know, but I realize this anxiety as a weakness of mine that can possibly be alleviated by having the property manager’s phone number communicated to guests as the person to contact in case of issues.
- One go-to helpline for all things: One thing I have learned in setting up short-term rentals in different cities is that finding the right help can be HARD. Picking a plumber, an electrician, a general handyperson, and any other skilled specialty when you need it is very frustrating, especially when you’re too far away to meet them and watch them work on their first job. I end up making the long trip for most small things, because I know I can trust myself. This is taxing on my time and energy. An established property management company has already done the work of sifting through the companies to avoid and found the ones they trust. Not to mention, they most likely get the best prices due to the relationship with these contractors and the amount of business they bring their way.
At first, the property manager was as puzzled as I expected; this was not a request he had ever gotten before. After initially brushing it off, we began to talk about the possibilities for this kind of agreement. Just because he hadn’t done it before didn’t mean we couldn’t custom-build some sort of arrangement. His biggest concerns, regarding more of the short-term rental operations work, were things that I wanted to continue doing anyway. Here’s how we discussed splitting the duties:
What I Would Continue
- Guest management: Vetting booking requests, handling pre-trip communications, and sending mid-stay check-ins would remain under my control. Much of this is automated with software anyway.
- Pricing: I would handle keeping my nightly rates in-check.
- Managing the cleaning work: Paying for every cleaning, receiving post-stay reports from my cleaner, and restocking her with supplies.
What The Property Manager Would Take On
- Seasonal upkeep
- Maintenance contact for guests
- Triaging issues to the right person for the job
As you can see, we tried to keep the PM’s duties as close to what they already do for their traditional rentals as possible. The challenge now is figuring out a pricing plan. Unlike traditional rental PM agreements, not every month’s income and occupancy would be the same. Plus, there will no-doubt still be guests who contact me with problems via the Airbnb or VRBO apps, as opposed to calling the PM’s number I have communicated. At the time of writing this post, we are thinking about a per-call pricing model. Basically, the property manager would receive a small fee for taking calls (whether from me or from the guest), triaging the issue, and making sure the work gets done. This sounds like an obvious model but it is not something the company currently does. This kind of work is covered by the 10% (of rent) management fee in their traditional rentals. As for the seasonal work of gutters, filters, lawn, snow, and occasional walk-around check-ups, we will probably just have a triage fee as these items come up throughout the year. The payments to the contractors and handymen themselves would flow through the property manager as well.
Keeping it Simple
This transition to a semi-managed model is not groundbreaking but it is influential to the future of my business. The removal of several stressors will allow me to expand to new units and dedicate more time to my job, the business, and things I enjoy. After spending a long time fully immersed in every part of the operation, I am at a point where I can-and-should identify ways to bring in help. This simplification will aid in the sustainability and longevity of my business. If you take one thing from this post, it should be this: just because it hasn’t been done, as was the case with a short-term rental management agreement for my PM company, it doesn’t mean the problem can’t be solved with a little creativity.