“Why pay people to do your job?”, is what people usually ask when discussing short term rental property management. And while that’s a valid point, there’s more to it that just that.
Short term rental property management involves using either a firm or an individual to help you out with managing your investment property or investment properties. Usually, multi-property investors consider using short term rental property management to help them out managing different properties. If you’re in the short term rental (or Airbnb) business, you already know that is takes a lot of work running one Airbnb rental, let alone multiple.
What are short term rental property management firms?
Short term rental property management firms are firms that aid real estate investors manage their short term rentals, or Airbnb investment properties. Traditional rental property management firms handle bigger investments such as commercial real estate, hotels, etc., while short term rental property management firms deal with Airbnb investments. Essentially, both types of firms do the same scope of work, only in different real estate sub-industries. The plain difference is that Airbnb investment properties are usually managed on a smaller scale than traditional investments.
Short term rental property management firms came into play with the surging growth of Aibnb, Airbnb properties, and Airbnb investment properties. Investors are jumping at Airbnb opportunies in different markets across the nation due to the high profitability index of many. Some of the most profitable Aibnb locations include Las Vegas, Moss Beach, Moses Lake, Cypress, and Westbrook, among others. Make sure to use Mashvisor to search for the best places to invest in real estate. Our investment property calculator will help you choose the most profitable properties in your location of choice!
Short term rentals: How difficult are they to manage?
The answer to most real estate questions is: It depends. And this one is no different.
There are many factors to consider when you’re making a decision like this one. What are your tenants generally like? What are your occupancy rates like? How many properties are you planning to invest in? If you have a high occupancy rate, meaning your rental is rarely empty, then you’ll have more work to do. If your tenants are usually good tenants in the sense that they don’t leave a mess behind, you’ll have less work to do during the turnover period.
Reasons to use a professional short term rental property management service
There are multiple reasons why using a short term rental property management service or company makes sense. To begin with, rental property management services usually have better technologies, which will most likely enhance the convenience for the property guests, and drive down the costs. This means that the profit margin will probably increase, allowing you to increase your cash flow.
Additionally, at times, short term rental property management firms offer better service than you could. This is especially true if you’re a busy real estate investor and cannot guarantee 5-star service to your Airbnb guests. Short term rentals are a service industry, after all. So, if you cannot provide the best quality service, using short term rental property management is definitely a good idea.
Another reason to use short term rental property management firms is the reduced risk factor. This is especially important if you’re just starting out or are less experienced in real estate. Short term rental property management firms are geared with excellent business plans and improved strategies for real estate investments. Moreover, they can often help you out with any legal documents. This can better help you avoid legal issues from arising, especially in today’s sensitive Airbnb laws and regulations reality.
Reasons not to use a professional short term rental property management service
Using short term rental property management is definitely beneficial, but there are some drawbacks to it. First of all, the service could end up costing you more than it’s profiting you. Services offered by short term rental property management companies are not free. That’s one more real estate cost that you need to consider. And it’s quite a significant one.
Secondly, you may miss out on experience in real estate investing if you rely on short term rental property management to do most of your work. This also comes with the risk of missing out on making connections with people in the real estate world. Additionally, even though you’re still your own boss, you have less control when it comes to making many decisions since you are essentially delegating them to others.
It’s true that we said that short term rental property management firms offer better service, but that’s not always the case. Many companies offer generic services for all properties and don’t really mind the unique differences of each of them, or the specific needs of the tenants.
Short term rental property management: Do you need it?
The decision is entirely yours.
If you feel like you can juggle the responsibilities of being a real estate investor, and managing multiple properties at a time, while maintaining quality service for your tenants, you may not need short term rental property management services. You should definitely weigh out the above advantages and disadvantages to your specific case.
Consider the costs of short term rental property management services. Is what you’re making off of your rental properties covering the costs of the service? Are you breaking even after or are you making profits? If you’re only breaking even, does it make sense to use short term rental property management services?
Also, do you think that using short term rental property management services will help you get better Airbnb reviews for your property? The answer to that is usually yes. And positive Airbnb reviews are very important.
So, all in all, if you feel like using short term rental property management will improve the quality of your Airbnb rental, enhance your Airbnb reviews, and increase your profits, by all means: go for it!