How To Manage Short-Term Rental Properties?
If you want to acquire short-term rental properties, one of the first things you should consider is how you plan on managing this unique type of real estate investment.
The good news is that the process of managing a short-term rental property is not that much different than managing a buy and hold property; however, there are some slight differences that must be considered.
These differences will vary depending on whether you decide to self-manage the property or hire a property manager. The decision to self-manage a property or hire a property manager both has advantages and disadvantages, but it will be up to you to decide which process works best for your goals as an investor.
What to Consider If You Self-Manage Your Short-term Renta
Choose a Listing Service or Platform
The first thing you should consider if you're trying to self-manage your short-term rental is to decide which of the listing services you will be using. It can be very difficult to self-manage a short-term rental without using an online listing service or platform, and in today's world, it can make things a lot more complicated for you.
Airbnb and VRBO are currently two of the most popular short-term rental listing sites. Both sites work pretty similarly; however, if you use VRBO, most of the potential tenants will be looking for vacation stays versus a normal non-vacation stay.
One of the great things about having one of these listing sites is that you will have your own centralized hub to manage reservations, payment, communication with the tenant, and you won't need to develop your own website to post your listings. So if you're not a tech-savvy person, learning to use either the Airbnb or VRBO platforms will be an easy way to help you start marketing your rental.
Marketing Your Short-Term Rental Using VRBO & Airbnb
Now that you have decided on what listing service you will be using, marketing is the next big piece you will be responsible for. One of the most common strategies people use today for short-term rentals is leveraging social media.
Social media can be a great tool to market short-term rentals because of the big traffic that the platforms receive daily. Regardless of whether you decide to use Facebook, Instagram, Twitter, or Pinterest, you need to make sure that you are taking quality pictures of your property for potential tenants. It is very typical for Airbnb or VRBO to give you a unique listing URL to post on your social media to drive traffic directly to your listing from your social media platform.
If social media isn't your thing, you can also use some of the more traditional marketing methods, such as business cards, flyers, and reaching out to tourist websites within your area to see if they want to post your listing on their site.
For more detailed resources on how to market a short-term rental property, check out these two blog posts below:
Cleaning & Maintenance
Having a plan for cleaning and maintaining a property is one of the biggest drawbacks of self-managing a short-term rental property. Because short-term rental properties have an extremely high turnover rate, it will require someone to both clean and ensure the upkeep of the property between tenants.
If you have the time, you can handle both the cleaning and the maintenance of the property on your own. What happens in most self-managing situations is the owner of the short-term rental hires cleaners and a maintenance staff. Of course, cleaners and a maintenance staff will cost more than if you handled the cleaning and maintenance on your own, but this is something you can consider when running the numbers on your rental property
Keeping the Books
One of the great things about using one of the listing services and platforms stated above is that they make keeping track of the books very easy with the software that they use. As a self-managing landlord using one of these services, there won't be much documentation you would need to have outside of what Airbnb and VRBO will provide for you.
What to Consider If You Choose a Property Manager for Your Short-Term Rental
So if self-managing is too time-consuming, you should definitely consider getting a property manager to help you with your short-term rental property. if you decide to take this route to manage your short-term rental properties, the first thing you need to consider is which property manager should you go with
Selecting a Property Manager
It is extremely important to select the right property manager regardless of whether you are investing in short-term rentals or traditional buy and hold real estate. Unlike self-managing your property, property managers will take care of the cleaning, the maintenance, the marketing, as well as making sure that your short-term rental is listed on the various listing services available.
In this case, the majority of the work that you must do as the investor is making sure you select the right manager to take care of your property. There are generally three big things you should consider:
Cost of The Property Manager
Marketing Strategy
How Well Will You Work With The Property Manager?
Property managers are not free. Make sure you understand the fees and how much you will be paying on a monthly basis to have your property managed for you. If not, then property management fees can easily turn a good deal into a bad one.
In terms of marketing, understand how your property manager will be marketing your short-term rental using social media or simply through their listing sites. You should also make sure you ask them how often they will be marketing your short-term rentals as well.
If you cannot see yourself working well with a potential property manager, it is probably best that you do not move forward with them. Once you hire a property manager, you are both in a partnership. If you can't simply get along with the individual, it will not make for a good experience in the long run.
Related Post: 6 Tips for Choosing a Great Property Management Company
In Summary
Choosing to self-manage or to hire a property manager is an important decision that should require a lot of button-front research before you make a final decision.
If you are self-managing, be sure to run the numbers to account for hiring a cleaning service and maintenance personnel as well as fees associated with the listing service you use. Also, be prepared to deal with tenants very often because you will be the person in charge of the property at all the time.
If you are getting a property manager, also run the numbers to make sure you can use their services without breaking your budget on the property. Pay close attention to the fees that the property manager will charge you, make sure you understand how they will be marketing your property, and lastly, be able to see yourself working well with that property manager before you go into business together.
Related Post: 7 Things You Should Know Before Investing In Short-Term Rentals