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First of all, congratulations on taking the first step to being a short-term rental owner. Doing so changed our lives forever! We are proud Airbnb superhosts, owning 4 rentals with over 500 5-star reviews. I use this blog to share a lot of my Airbnb hosting advice. Today, I want to answer a question I get asked frequently: Should you self manage an Airbnb or hire a property management company?
Per usual, I have a lot of thoughts about this, so let’s break it down!
Owning And Managing A Short Term Rental
Sometimes, I have to pinch myself and wonder, “Is this really my life”?
I am able to take home over $200k per year (net profit) on my 4 small vacation rental condos on 30A. Five years ago, buying a vacation rental near Rosemary Beach was just a pipedream. But I made it happen, and it was the best decision our family has ever made.
Often, you see people selling this dream. They are great salesmen with flashy smiles and oozing charisma. It’s inspiring but unrelatable. Can real people actually do this?
I am here to say yes! As a 41-year-old mother and wife, I am doing it. I have built this entirely on my own and done things my way. My husband and I own all four of our short-term rentals, and I self-manage them 100% on my own. I designed each space, and every item in our Airbnbs, from quick-drying towels to easy-to-replace silverware, was intentionally placed there by me. I have experienced a lot of success, life-changing in fact.
But I am just a regular person. As I write this, I am sitting in my home office, in my pajamas, drinking my 3rd cup of coffee, thinking I need to wash my hair today. Most ladies reading this will know that struggle! I probably should.
Anyway, thanks for being here. I love doing this! Owning and managing my vacation rentals is my best job ever. I share great content here on my blog (for FREE).
Today, I will answer one of the biggest questions new vacation rental owners face. Or, maybe you haven’t purchased one yet and want to know how all this works.
You’re in the right place! So, let’s dive deep and answer the following question.
Should you Self Manage an Airbnb or Hire a Property Management Company?
We are going to look at this with an open mind today. However, I am biased because I self-manage my Airbnbs. Hiring a management company would have prevented me from reaching the level of success that I have achieved. The trade-off is that this is my job, and owning an Airbnb is in no way a passive income.
I want to break down the pros and cons of self-managing your rental and hiring a company to do it for you.
Pros and Cons of Self Managing an Airbnb
Control freaks, listen up! This is your time to shine. Having a keen attention to detail and the ability to be hands-on will benefit you when you self manage an Airbnb.
On the flip side, things aren’t going to be out of sight or out of mind. You are going to have to learn to relax a bit. This person is me. Hi, I’m the problem, it’s me.
But, the desire to do it myself and do it right has earned me such high Airbnb ratings and allowed me to cash flow so well.
Pros of Self Managing Your Airbnb
Caring For The Property: Nobody will care for your property and guests as you do. Sure, you need to rely heavily on your cleaning company, but generally, when you self-manage, you can make sure things are up to your standards.
Maximize Revenue: Self-managing your rental allows you to set your own pricing. I am meticulous with my calendar. I adjust prices daily and make my own calendar rule sets to avoid any gaps in my calendar. We don’t do single-night stays and rarely do two-night stays. Weekly, one or two of those gaps eat up most of my profit margin. I run a 97% occupancy rate, and my calendars generally look like this. These are actual screenshots from three of my 30a rentals this summer.
Dynamic pricing has been a game changer, allowing me to keep my calendars filled and maximize profits.
A Personal Connection: Guests love a personal connection and feeling valued. I am in direct contact with every guest, curating recommendations for their group and visit. Excellent communication before and after a stay and checking in during the stay will set you apart. Most sizeable rental management companies treat your renters as customers, not valued guests.
Cons of Self Managing Your Airbnb
Relying On A Cleaning Company: Having a great set of boots on the group is critical. Most hosts manage remotely and have to rely on their cleaning companies. If you don’t have a great one you trust, you could feel like your hands are tied fairly often.
You’re In Charge: This may be a good thing for some. But you are 100% responsible for making sure things are great. For me, this means that I need to lay eyes on my places at least every 8 weeks. I aim for 4-6 weeks. This is why you want to be somewhere semi-close to your rental.
We are about 90 minutes away. Each time I visit, I have a carload of fresh supplies, replacement linens, etc.. And then I spend hours scrubbing walls, reorganizing cabinets, and essentially re-setting my places as new. Many people aren’t this hands-on when they self manage an Airbnb, but it’s played a massive role in my success.
Being On Call 24/7: If you choose to manage your own Airbnb, you need to be accessible at all times. Gone is the ability to unplug for a day. This doesn’t mean guests will message you all day long, but you must ensure they can reach you. This includes when you are on a European Vacation or a Caribbean Cruise.
How Much Time Does it Take to Manage an Airbnb?
Touching on that, how time-intensive is self-managing your rental? As I mentioned earlier, this is not passive income. But you can streamline processes to get the most ROI for your time.
I take a lot of ideas from two books: The 80/20 Principle and The Four-Hour Work Week. I want to put forth as little effort as possible and get the best results. Less effort, more money. That’s the name of my game!
For this reason, I exclusively host on Airbnb. I don’t have the desire to manage multiple calendars or use a third-party system.
I also do not book directly, ever. The average 15% fee Airbnb guests pay, and the 3% (basically a card processing fee) that comes off my payout are worth it. The Airbnb platform is critical to my workflow and enables me to communicate efficiently through the app. A direct booking may save the guest a fee, but it means extra manual contracts/payments for me and requires me to communicate via text/email. Both are things I am not interested in doing.
I never really spent more than an hour each day working when I had one property. Now that I have four properties that stay rented year-round, I spend about 1-2 hours daily on work related to my short-term rentals. It’s sometimes more, but the main thing to remember is that you need to be accessible 24 hours a day. It may be a one-hour block in the morning coupled with 20 5-minute periods throughout the day.
And there are most certainly days when I am constantly on my phone working. On the fun days, it’s because a lot of bookings are coming in. On the worst days, it’s Karen. She doesn’t think the floors are clean enough. And it’s always at the worst possible time.
Can You Manage an Airbnb Remotely?
You can! I know many owners who visit their property once or twice per year. My friends travel internationally full-time and can manage an Airbnb short-term rental while on the go. However, I will say that staying up until midnight while traveling in Paris, just waiting for a thumbs up from the cleaners so that you can send a door code, is never fun!
I hit on this earlier, but your cleaning company is clutch here. Additionally, you want to have one or two handymen familiar with your property that you can reach out to. Scheduling routine maintenance and building relationships with those service providers is very helpful. My HVAC company has saved me several times by prioritizing me and coming out the same day.
Pros and Cons of Hiring A Property Management Company
So, that was a lot to think about when considering self-managing a rental. Let’s look at some of the benefits and setbacks of hiring a property manager. to manage an Airbnb or any short-term rental.
Pros of Hiring a Property Manager
Hands-Off Approach: You can be 100% hands-off if you want to. This is a significant plus if you work full-time at another job or can’t be accessible at all times. They usually handle everything from marketing to maintenance.
Out Of Site and Out of Mind: It’s unfortunate when rental guests don’t take care of your place, and it’s easy to take it personally. What’s worse is when a booking has a lot of red flags that cause you to overthink, but you can’t just cancel for no valid reason. Sometimes, it’s nice not to have this added stress.
Checks Roll In: This is as close as it gets if you want passive income from a rental property. Getting checks in the mail is nice, especially if you don’t have to do anything to earn them. It’s a fine example of letting your money do all the work, like receiving dividends.
Cons of Using A Property Management Company
So, why do many people like me choose not to use a property management company to manage an Airbnb or investment property?
Limited Control Over Pricing & Your Calendar: Often, management companies use set prices for different seasons, which limits your ability to adjust based on supply and demand. Sometimes, popular dates are booked early for too cheap, and others remain empty because they are overpriced.
You’re Just Another Account: I want to repeat this. Nobody cares for your place the way you do. Typically, you are just another account. The person laying eyes on your place is frequently a minimally paid employee, and turnover is frequent. Some are great! But, I see more complaints than praise regarding management companies in my property owners groups.
High Property Management Fees: These fees are usually well-earned. It is a lot of work to oversee all facets of a vacation rental, from maintenance to guest relations.
How Much Does it Cost to Hire A Vacation Rental Property Management Company?
Continuing that topic, how much do property management companies charge? Typically, fees are in the 20%-30% range. Some factors include whether they offer linen programs and include maintenance in their fees. But that’s all money off the top and could eat up most of your profit.
This is fine if you want to cover the mortgage and have a place to enjoy yourself. It’s absolutely okay in that case, and there is nothing wrong with going that route. But, if you want to maximize your net profits, this is a deal breaker. Plus, they often aren’t getting top nightly rates and don’t keep the calendar filled as well as you could yourself. Using a vacation rental management company to manage an Airbnb or vacation rental could cost you upwards of 40% to 50% in the long run.
Airbnb Cash Flow Example
Let’s look at an actual example from 2022.
One of my Airbnb units had a $100,000 gross annual Airbnb payout. My expenses were $45,000. Leaving me with a $55,000 profit (not including principal payments). After factoring in my principal payments, my take-home profit was precisely $50,000, or 50% of my gross payout. This is before income taxes but after all expenses.
So, my cash flow was $50,000 in the green. Multiply that by four, and I make over $200k per year. Crazy, right? Many people think that I don’t work at all outside of this family travel blog, of course!
Let’s pretend a management company had this contract. Hypothetically, the gross payout is a generous $85,000, knowing they aren’t filling every gap and fluidly adjusting prices. After expenses and principal payments, you are left with $35,000. Say they take an average 25% fee on the gross payouts equalling $21,250. In the end, you have a $13,750 profit. That is $36,750 less than you would make managing it yourself.
The latter is still profitable and successful, considering you didn’t have to do anything. But $50,000 is more.
So, do you want the job? It pays about $36,250 more per unit, in my case, is flexible, and you can do it remotely. Furthermore, when you scale that up when you add more properties like I did, we are talking about an EXTRA $145,000 in your pocket when you self manage. Is the job worth it for that?
How To Decide Whether You Want to Self Manage an Airbnb or Hire a Property Management Company
But this is for you to decide. Just because it works for me doesn’t mean it’s a good fit for you. I have the time, and as a travel writer and photographer, I enjoy this niche. Choosing to own and manage an Airbnb makes perfect sense for me! Ours are also small and fairly easy to manage. If you purchase a large beach house as an investment property, it may require a lot more time and energy.
Looks at all of the factors. Are you confident you can find a solid cleaning company and handyman? Do you have the time? Are you even interested in doing this yourself? Does this sound fun?
My four Seacrest Beach Airbnbs are top performers. I typically have the highest rates and occupancies in our area. That is because I am providing top-notch service and setting myself apart. So, I acknowledge that my numbers are on the high end and a product of a lot of blood, sweat, and tears.
In another scenario, we could look at a property that grosses half as much at $50,000 with $35,000 expenses, as many are fixed. In that case, using the same calculations, you are talking about making $15,000 yourself vs. a net profit of only $2500 with a management company. This assumes they get the same $50,000 gross payout as you.
Which option is worth it? Is either one viable when considering your time and money vs. return on investment? One special assessment or emergency appliance replacement could mean that you are actually in the hole.
It’s a lot to think about, but in all fairness, this is a significant investment and decision to make. I hope this gave you a lot to think about!
Airbnb Hosting Guide
I have many FREE Airbnb hosting resources on my blog, and most have the same level of thought and detail as this one. Please take a minute to read through them!
Setting Up Your Airbnb
When setting up your vacation rental, I have complete Airbnb buying guides sharing everything from the best mattress for your Airbnb to choosing a TV that includes gest mode.
My popular post on making your Airbnb baby-friendly is a must-read. This is the best way to set yourself apart and ensure you stay booked year-round!
If you FOLLOW (click the heart icon) my Amazon Storefront and save that link, it makes it very easy to ensure you have everything. Plus, it’s a great way to check and see if your essentials are on sale quickly. I just noticed my duvet cover is 50% off when I pulled my Amazon Airbnb Bedding and Towel List and ordered another!
How To Be A Great Airbnb Host
My Airbnb Superhost Guide shares my workflow and how I set myself up for success. I even have a post about how to be a great guest called Don’t Ghost Your Host because it’s my personal pet peeve. Nonetheless, I have no shortage of advice to share with you!
More FREE Airbnb Hosting Resources
Want to steal my welcome message? Or learn about how we finance our condos? The Airbnb Hosting section of my blog is a great resource! I hope you find my blog useful when you self manage an Airbnb of your own!
PIN This How To Manage An Airbnb Blog Post
