Are you a real estate investor who owns and rents out a vacation home on Airbnb? Are you thinking about hiring an Airbnb rental property management company to overlook the investment property? If your answer is yes, then keep on reading to determine whether or not this is the best option or a waste of money.
A big part of successful real estate investing comes from great property management, and there are many companies that offer this service such as Pillow and Airhandy. However, property management companies are not the only way to achieve this: you can do it yourself. Let’s take a look at the pros and cons of hiring an Airbnb rental property management company to see whether or not this is the best choice for your real estate investment property.
Airbnb Rental Property Management Companies: Why Consider Them
Airbnb Rental Property Management Companies Have Better Technology Resources
Many Airbnb rental property management companies deal exclusively with vacation rental properties, which means they more likely to have access to technologies that make the rental process safer, easier, and more profitable for the real estate investor.
There are many high-tech tools of the trade that Airbnb rental property management companies use. Examples include high-tech lockboxes to contain keys, software programs for pricing, invoicing, and tenant screening, and the best apps that ensure all repairs and problems are being addressed promptly.
The use of this technology results in greater convenience for everyone, including the real estate investor and tenants. That means a higher return on the investment and more positive ratings and Airbnb reviews for the rental properties.
Related: Airbnb Reviews Are Your Best Friend and your Worst Enemy in Airbnb Rentals
Airbnb Rental Property Management Companies Offer Better Marketing and Advertising
For many real estate investors, getting the exposure needed to maximize the rate of return on investments can be very challenging. The second benefit of vacation Airbnb rental property management companies is that many of them offer advertising and marketing packages, using landing pages, social media, and listings on major rental websites.
In addition, a number of Airbnb rental property management companies have a rental agency division the purpose of which is to maintain contacts with thousands of prospective tenants or guests, besides performing tenant screening. Therefore, even without investing money in marketing and advertising, real estate investors could actually see a steady flow of visitors originating from their Airbnb rental property management company. That means higher profits!
Airbnb Rental Property Management Companies Ooffer Improved Service and Response Time
For real estate investors who own vacation Airbnb rentals outside their local area, or own multiple rental properties, having a flexible schedule for attending to tenants and the investment property’s needs can be a hassle, which is common for a large amount of vacation Airbnb rentals owners in real estate investing.
In this situation, turning to Airbnb rental property management companies is a must. They provide real estate investors with assistance and prompt services to the Airbnb guests to ensure they have a great experience. This allows real estate investors to tend to other matters, while at the same time be assured that their Airbnb guests have a positive experience, which in turn can result in an improved rate of return on investment since there will be a higher chance to see repeat guests.
Related: How to Calculate the Rate of Return on the Rental Property
Airbnb rental property management companies can also perform more frequent site visits than the real estate investor who doesn’t live near the investment property. Leaving the rental properties unattended for months at a time can cause real estate investors tens of thousands of dollars in damage. On the other hand, an Airbnb rental property management will most likely notice and fix issues in short order.
Airbnb Rental Property Management Companies Reduce Risk
A vacation Airbnb rental property management company can go a long way toward reducing risks, especially financial risks. They ensure that contracts are well-written and that the rental agreements release you from some liabilities, while still giving you the power to pursue an Airbnb guest or tenant for any damages.
Moreover, there’s a reduction in terms of the financial risk; some Airbnb rental property management companies offer a guaranteed income model that protects real estate investors from losses that would arise when the investment property is vacant. Furthermore, working with a vacation Airbnb rental property management company that oversees bookings means real estate investors are also more likely to keep their vacation home consistently occupied.
Airbnb Rental Property Management Companies Take Care of Tenant Screening
Finding the right tenant or Airbnb guest for your vacation home can be a very long and frustrating process for a real estate investor. Working with an Airbnb rental property management company, however, allows real estate investors to put their worries aside as management companies develop a process for tenant screening that eliminates bad or risky tenants who might damage the investment property, and find the best tenants to ensure a successful real estate investing.
Not only that, but an Airbnb rental property management company will do all the communication with the tenant. This includes the interview process and managing any complaints or emergencies that may arise day or night, in addition to handling the transition of tenants moving in and out of the vacation home.
Airbnb Rental Property Management Companies Keep You in Check
Property management companies are up-to-date on state and federal rules and regulations regarding landlord-tenant rights and responsibilities. When the real estate investor who owns a vacation home works with an Airbnb rental property management company, the company’s knowledge and experience will help in ensuring you won’t unknowingly violate any of these regulations which could put the investment property and finances at risk.
Airbnb Rental Property Management Compaies: Why Opt Against Them
Airbnb Rental Property Management Companies Affect Your Profit Margin
The main reason why many enter the real estate investing business is to make money through rent. The average vacation Airbnb rental property management company requires the first month’s rent as its first payment to cover its expenses for any advertising, showing the property, tenant screening, and other general expenses. After that, the range of fees is 8-10% of each month’s rent. Real estate investors have to think about their return on investments and how they’re going to pay off mortgage payments. Hiring an Airbnb rental property management company goes against saving earnings.
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Airbnb Rental Property Management Companies Prevent Gaining Control and Experience
One of the major reasons why the real estate investor would hire an Airbnb rental property management is not having to deal with tenants. As we’ve mentioned, management companies take care of tenant interviews, tenant screening, collecting rent, and handling tenants moving in and out of the rental properties. However, interacting with tenants and going through these processes yourself allows you to gain much-needed knowledge and experience in the real estate business.
Given an Airbnb rental property management company the full control on your vacation home will leave the real estate investor feeling lost in the market, simply because you can’t understand something that you have no experience with.
Airbnb Rental Property Management Companies Don’t Build Relationships
Some returning Airbnb guests prefer seeing the same property manager/owner when they arrive for their stay. When real estate investors deliver the keys to Airbnb guests and welcome them to the rental personally, it allows an opportunity to build a bond with those individuals, which makes it more likely for them to return in the future. When hiring a vacation Airbnb rental property management company, establishing this type of relationships can be challenging because a different person may assist with every visit.
Related: What’s the Secret to Maintaining a Good Landlord and Tenant Relationship?
Your Property Means More to You Than to Airbnb Rental Property Management Companies
Real estate investors, without a doubt, care more about improving the rental properties than any property manager ever would. You can find the best Airbnb rental property management company on the planet, but they have other clients and there will always be things you could have done better yourself.
Time to Decide!
Now that we’ve established the advantages and disadvantages of Airbnb rental property management companies, it is time to determine when hiring one to take care of your vacation home is a must and when it’s a waste of money for a real estate investor.
If you live near your vacation home and have a flexible schedule to manage visits and repairs, then you are more than capable of managing the investment property yourself. If you’re a real estate investor who is just starting a real estate investing career with a rental property, hiring a professional management company is the opposite of what you should be doing. Why paying a professional property manager when managing only one investment property is fairly easy and you have the time for that?
The only valid reasons why real estate investors should go for vacation Airbnb rental property management companies is if they own multiple rental properties and don’t live near their vacation home.
Related: Are You Ready for Owning and Managing Multiple Rental Properties?
Conclusion
No one can deny that an Airbnb rental property management company is a great asset for any real estate investor looking to invest in vacation Airbnb rentals. Having said that, however, it’s not always a necessary option. Successful real estate investors evaluate the pros and cons of this option to determine when it’s a must and when it’s only a waste of their money.
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