by Open Air Homes
Choosing whether to manage your own short-term rental property is a personal decision, with several factors coming into play. While Open Air Homes does offer full-service property management, our goal isn’t to provide that to every homeowner we encounter. Oftentimes we meet potential homeowner partners and decide together that the best decision is for them to manage their own property.
So, how can you tell whether you should hire a property manager or self-manage your short-term rental property?
Ask yourself these nine questions when deciding between self-management or hiring a property management company, along with tips on what to look for when choosing a property manager.
Related: The Ultimate 6-Step Guide to Property Management Success
This is arguably the most important question you can ask yourself when deciding to manage your own short-term rental property.
Many people have claimed that self-management is easy, automated, and takes very little time. That may be true if you have very well-behaved guests and zero issues, but in this industry, things inevitably go wrong and require a hefty time commitment.
It also takes time to develop a thorough customer service model, learn how to diffuse conflicts, and familiarize yourself with the hospitality industry to meet guests’ needs. This brings us to our next question…
Hospitality is a review-driven and algorithm-driven industry, and there’s more competition in the space than ever before. Vacation rentals in 2022 are expected to reach $81.143 billion globally. Learning the industry’s ins and outs is crucial to standing out in the ultra-competitive vacation rental market.
Does it sound interesting to you to learn how a hotel works, take the best aspects of the hotel industry and implement them into your rental property management?
If the answer is a genuine yes, you’re well on your way to managing your short-term rental property. Hospitality requires a commitment to being of service to your guests’ varying needs, and a growing number of guests on sites like Airbnb have come to expect the same quality of service that hotels offer, or you risk bad reviews.
Were you a server in college and hated the experience?
If so, working in the service industry probably isn’t for you. In this case, we’d recommend hiring a property manager. Open Air Homes’ hospitality-trained team works to make every guest feel heard and their suggestions implemented, and they’ve come to expect very fast communication.
Read: Here’s what to expect in the 2022 short-term rental market
Our founder Brad and his husband Julien have told stories of leaving a Saturday barbecue to purchase and deliver a propane tank. They’ve vacationed in foreign countries while frantically helping a guest that accidentally locked themselves out of a home at 3:00 am. They made the decision to hire a dedicated, supportive team and have 24/7 support so that guests feel supported during their entire stay.
When self-managing your vacation rental property, you will be on call. Your guests will lock themselves out at night, and issues often arise on weekends. Guests will inevitably need help working the TV, even if you’ve provided them with perfect instructions. Your guests will move the HDMI cables from one outlet to another, and you’ll need to be available to troubleshoot.
What’s behind every successful, fully-booked vacation rental?
A responsive team that handles maintenance issues as soon as they arise.
If you live more than 45 minutes from your rental property, it’s important to build a book of local vendors who are available to quickly remedy clogged toilets, broken pool heaters, or broken appliances.
Establish a supportive network of vendors for your short-term rental property by making sure you have the following:
When an issue arises in a home, you can’t always move guests easily to another room, the way a hotel might. You’ll want to have a Rolodex with backups for after hours, or you run the risk of guests leaving bad reviews and requesting a refund.
Host Tip: You will want to negotiate a fair rate for both you and them, but understand that as a one-off client of theirs, the pricing will likely go up. This is one of the benefits of using a property management company with a trusted Rolodex of vendors; we not only have plenty of vendors on call, but pricing is generally more reasonable due to the amount of work we provide them. Many of our vendors, especially our cleaners, work nearly exclusively for Open Air Homes.
Ten years ago, you could throw any listing on Airbnb and likely take bookings. Why?
Because in the early years of vacation rental, there was very little supply and a whole lot of demand.
This is no longer the case. The allure of buying a vacation rental has seeped into every real estate investor level – from institutional investors to first-time home buyers. There’s more supply than ever on the market, and you have two options to compete for high occupancy and a high net return:
Design/desirability or price point.
According to Joe Nahem in an article in the New York Times, “Look at what else is out there, compare: What can I do to make mine a little better?”
While we aren’t the lowest price point in the business, we strive to take on truly desirable homes. These homes are shared more, saved to “wish lists” in higher numbers, and have higher conversion and view rates on Airbnb. Airbnb’s algorithms track these consumer behaviors and give priority placement in search results to the most desirable homes. Landing on page 5 of Airbnb is similar to landing on page 2 of Google – you’ll receive fewer views.
Even if you self-manage your home, we suggest hiring an interior designer specializing in hospitality design. We partner with Interior Particulier on higher-end projects and take more affordable projects in-house through Open Air Design.
Homes designed by Interior Particulier consistently receive 5-star reviews, which gives us better placement and increases our rate over time to earn our homeowners top dollar.
Occupancy also increases, as extended stay guests typically prefer a fully-realized home with thoughtfully-curated amenities.
Whether you self-manage or hire a property manager, focusing on design in a crowded industry is one of the most important tips we can give.
Related: What You Need to Know About Staging a Vacation Rental
A big criticism of the short-term rental industry is that these homes negatively impact communities. While this certainly can be the case, we at Open Air Homes believe it doesn’t have to be. Here’s why:
Early on, we learned that we couldn’t be a faceless company managing the home next door; taking a forward approach was more effective. We acquainted our team with local residents, provided our 24/7 texting service to neighbors to reach out with any concerns, and established a plan to prevent incidents from escalating. Transparency and authenticity are key.
Ask yourself before investing in a rental property:
If you self-manage from more than 45 minutes away, developing a strategy to handle situations like this is critical.
Short-term rentals vs. long-term rentals
Monetizing your home is not without risk, and it increases when pivoting from long-term leases to a short-term rental model.
So if long-term rental properties are a less risky investment, why do some homeowners prefer short-term rentals?
There’s one big reason…
Profitability.
Are Short-Term or Long-Term Rentals More Profitable?
Research has shown that despite the higher risk involved with short-term rentals, they tend to be more profitable than long-term rentals. In fact, according to the Telegraph, short-term rentals often rake in 30% more than long-term rentals.
Short-term rentals also mean more upkeep, marketing, and maintenance for homeowners.
Open Air Homes provides a team, established vetting system, and proven operational procedures to keep the risk of short-term rentals as low as possible.
There’s an emerging appetite from guests for Month+ rentals, and a significant and growing portion of our portfolio is for Month+ stays.
How Much do Property Managers Charge?
Property management companies typically charge between 20-30% of the nightly rate to manage your property.
We suggest steering clear of companies that charge 15% and below. While a higher rental income is enticing, these enterprises are often nearly entirely automated and even outsourced – which means they don’t spend much time getting up close and personal with your property.
A hands-on approach is necessary to ensure that guests consistently have fantastic experiences and leave glowing reviews.
Suppose you calculate a $10,000 monthly income for your short-term rental property. Are you comfortable taking home $7,500 of that $10,000 in exchange for having the work off your plate?
If so, hiring property management is likely for you.
Host Tip: Please note that a skilled property management team will use dynamic pricing, and therefore instead of taking home on average $10,000, they may be able to get you $12,500 a month, in which case this additional amount makes their services much more worthwhile.
Roadblocks are unavoidable when launching a short-term rental, but they aren’t impossible to fix. Homeowners hire us specifically to problem-solve and provide guidance during the tricky process of monetizing their homes. We use our proven system during the onboarding process to thoroughly analyze every single home and identify potential issues before they escalate.
While it’s nearly impossible to avoid issues when opening your home to strangers with different ways of living, it is possible to diffuse them before they intensify.
Open Air Homes’ team is committed to providing guests the pinnacle of coastal white-glove service. They approach every concern with an understanding of what it means to respect the community.
No matter where you are, you can rest assured that your guests are happy and your property is thriving.
The reality is that self-managing your short-term rental isn’t as easy as it sounds. It takes years to become a hospitality expert: conflict resolution, project management, marketing, intuitive interior design, and even foreign languages are all skills that trained hospitality professionals possess.
If you have the time, capital, and interest in learning to manage your own property, then we say go for it!
However, if you want to:
…then we recommend hiring a property manager.
Are you ready to monetize your home and provide guests with the best vacation rental experience possible? Learn how here.
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