Many real estate investors purchase short-term rentals with the idea of generating passive income. Becoming a landlord and making passive income, however, is not that simple and goes far beyond choosing the best Airbnb investment property.
Actually, to start making money with Airbnb, the real estate investor really needs to sustain a high level of Airbnb management. In case the Airbnb host wants to own a passive income investment, he/she should consider hiring a third party. The third party (a person/company) will take care of the property, reducing the effort of the owner.
Generally speaking, there are two main options an Airbnb host can consider in such situations. These are, namely, hiring an Airbnb co-host or a professional property manager. Choosing one or the other can have a serious impact on your business and the rental income your property generates.
In order to make a well-informed decision, we will present you with all the information you need to know. We will discuss Airbnb management as well as the difference between an Airbnb co-host and a professional property manager.
Note: Use Mashvisor’s Airbnb rental calculator to find and analyze the best short-term rentals. To learn more about our product, click here.
1. What Should You Know About Airbnb Management?
When buying an Airbnb investment property, you should be prepared for what is ahead of you. The truth is that in order to start making money with Airbnb, you should take numerous things into consideration and implement them in the management of your short-term rental property.
Typically, Airbnb guests stay at the property for a few days. This means that, if you have managed your bookings correctly, there is a constant flow of new people coming in. As you can imagine, this means that the property requires quite a lot of maintenance. For instance, you need to prepare the place for your Airbnb guests. The latter includes cleaning, restocking supplies as well as fixing and repairing.
Moreover, in order to ensure that your rental is one of the top Airbnb listings, you need to show an attentive attitude towards each guest and be available to assist whenever needed.
When becoming a landlord of a short-term rental, you should also put effort into the Airbnb listing process. This means finding an attractive way to present your property, responding to potential guests as soon as possible, finding ways to be competitive among the market, and so on and so forth. The reason behind this is that the amount of bookings you get is tightly correlated to the Airbnb profit you will make.
2. Airbnb Co-Host vs. Professional Property Manager
As previously described above, taking care of an Airbnb property is not an easy task. That is why some real estate investors are willing to hire a third party to help them, despite the fees. This third party may be either an Airbnb co-host or a professional property manager. But what is the difference between the two?
Airbnb Co-Host
An Airbnb co-host is typically someone already familiar to the owner of the property. This might mean that the Airbnb co-host is a family member, a friend, or even a neighbor.
When hiring a co-host, you divide the tasks. This means that you agree on who will take care of what when it comes to the rental property management. You should also establish in advance how much of the rental income the Airbnb co-host will get and how much he/she will contribute towards rental expenses.
It is important to note that the person you hire as a co-host does not need to be a professional in the field. It is rather that he/she gets involved in the business in order to help you increase the Airbnb profit.
Professional Property Manager
A professional property manager, on the other hand, is something completely different. Yes, in a sense, professional management companies also help the owner take care of the Airbnb investment property. However, a professional property manager is an experienced person in the field. He/she gets paid to complete one or several different tasks in regards to the short-term rental.
When it comes to the costs of hiring a professional property manager or professional management companies, we usually talk about property management fees rather than the division of rental income.
Moreover, when hiring a professional for the job, you can leave all the tasks to the manager and simply receive a passive income from your short-term rental. Of course, it is wise to check on the property every once in a while. You can also hire a professional property manager for once specific task. Such a task may be cleaning, dealing with taxes or bookings, etc.
3. Hire an Airbnb Co-Host or a Professional Property Manager?
Logically comes the question: “How do I decide whether I should hire an Airbnb co-host or professional property management?” Well, here are some suggestions that might make your decision easier.
It is a good idea to hire an Airbnb co-host if you have a person whom you can trust and know that he/she will be an asset to your real estate investing business. An Airbnb co-host is also a good idea if you still want to be involved in the property management and be on site, but you just need a little help.
You might be leaning towards hiring a professional property manager if, for example, you have invested in property out of state or out of the country and cannot be present at all times. The same is valid if you are already too busy with other properties and want to own a passive income investment.
Whichever one you go with, it is important to evaluate your specific situation and assess what kind of help you need. You should do so in order to make the most of your Airbnb property.
To learn more about how Mashvisor will help you make faster and smarter real estate investment decisions, click here.