Many real estate investors assume that by conducting real estate market analysis and investment property analysis, their job is complete. However, selecting the best location and the most profitable rentals on the basis of measures such as cap rate and cash on cash return is only a small part of the residential real estate investing business. Even if you have selected a profitable, high-in-demand location, established the optimal rental strategy and have chosen traditional rentals or short term rentals with high cap rate and cash on cash return, you will not start making money in real estate if the rental property management is not on point.
Of course, the rental property management for traditional rentals and short term rentals differs. Moreover, there is a way to minimize your effort as a full-time investor and even become a part-time investor. You can do so by handing over your Airbnb rental properties to a professional property management company. Yet, these services can be quite pricey. So, here comes the big question: Is professional Airbnb property management worth the cost?
#1 Airbnb Rental Properties and Renting Out on Airbnb
Airbnb rentals are investment properties leased on the real estate market for short term accommodation. This implies that such properties are typically occupied by Airbnb guests for a night or a few days, but definitely no longer than a month/a couple of months. Anyway, due to the flow of guests, Airbnb rentals require a lot of maintenance. This includes cleaning after each and every guest and preparing the property for the next occupant. Additionally, supplies should be restocked and refilled, if needed. Further, the Airbnb host should be available for his/ her guests in case they need anything or have a question. In order to ensure better Airbnb reviews, many house investors take an extra step when renting out on Airbnb. This might be preparing a meal for the Airbnb guests or taking them on a tour in the area.
Moreover, the Airbnb host will also have to deal with taxes, local laws, and regulations, placing and managing the property online and coordinating the schedule of visits. This sounds like a job for a full- time real estate investor, doesn’t it? Well, it is true: Airbnb property management requires a lot of work and effort in order to help you start making money in real estate.
Nevertheless, there is another possibility of generating a great Airbnb rental income while being a part-time real estate investor. This can be achieved by leaving your property in the hands of professional Airbnb property management.
Interested in how to find the best Airbnb rentals? Make sure to read “Airbnb Rentals: Finding Income Properties Using a Heatmap.”
#2 Professional Airbnb Property Management
When it comes to discussing professional Airbnb property management, there are two main things that you should consider. First of all, you should think about what exactly professional property management for short term rentals means. Sure enough, you should also think about the expenses such a service would bring to your budget.
What Is Professional Airbnb Property Management?
Well, professional Airbnb property management simply means that a third party (a person or a company) takes care of your property instead of you. Of course, there are different things which such a deal might include. For instance, the professional Airbnb property management might simply clean the property and prepare it for its next occupants. However, the service might also include keeping track of your Airbnb reviews and making sure the property is well presented on the Airbnb website. Some real estate investors even leave the management service to deal with taxation, legal requirements, and documentation. All this sounds great, but how much does it cost?
Do you want to learn more about professional Airbnb property management? Make sure to read “Airbnb Property Management: Is It a Must in Short Rental Real Estate Investing?”
How Much Does Airbnb Property Management Cost?
The truth is that there isn’t a single pricing formula for such types of services. We might partially explain this by the fact that each Airbnb market is different. Therefore, each market has different requirements for short term rentals and different criteria for good Airbnb properties. Moreover, the demand rates are different and so is the Airbnb rental income. That is why the costs might be fixed or might also be a percentage of the money generated by the property. Additionally, the price may vary depending on the occupancy rates of the property and the time it stays vacant. In all honesty, however, such services typically take a big percentage of your budget and are not always worth it.
#3 Is Professional Airbnb Property Management Worth the Cost?
So, here we are, facing the big question of this real estate investing blog. To be sincere, this question does not have a single answer. The answer is in relation to the specific case. So, let’s see when it is worth it to use professional Airbnb property management services and when it’s not.
Yes to Professional Airbnb Property Management
It might be a good idea to use professional management services in case you own and manage a property in an area far away from where you live. In this case, you will cut the costs of traveling. Further, you will ensure that the property will be taken care of at all times and that the Airbnb guests will have a person to contact in case they need something.
Another reason for considering such a service is if the investment property is your side business. This means that you have another full-time job and simply lack the time to take care of the property.
Last but not least, such property management is worth it if you can arrange or negotiate an affordable price to pay the third party. Interested to hear more reasons for hiring Airbnb property management? Make sure to read “6 Reasons to Choose Airbnb Property Management: The Easy Way to Rent on Airbnb.”
No to Professional Airbnb Property Management
There are a few scenarios when paying the costs of professional Airbnb property management is not worth it. For instance, when you live nearby and managing your property is absolutely feasible. Another situation is, for instance, when you prefer to manage your own business and be in control of the properties you own.
Of course, if Airbnb rentals are your full-time job and you are available to take care of the investments and their guests, paying extra for management is simply not necessary. By operating the business yourself, you can also cut costs and invest the saved money in expanding your real estate investment portfolio.
Before jumping into the management of the property, however, you should first find the best Airbnb rentals. You can do so by using Mashvisor’s Airbnb profit calculator. This tool is a type of investment property calculator specifically designed for analyzing short term rental properties. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.