Self-Managed or Professionally Managed Vacation Rental?

Kate Stoermer Author

In an era where everyone is teaching self-management, should you actually self manage?

One question I get a lot is about self-managing your vacation rentals, usually as a work-around to paying the fees associated with professional management. Professional management fees can run a spectrum, anywhere from 10% - 35% of gross income.

Wait, 10% all the way to 35%? Okay, so on the lower end, it's probably a hybrid model where you will spend some time engaged with managing the property - such as identifying and hiring the cleaner and maintenance people but having the marketing and the day-to-day managed by a national property manager. At the higher end, you shouldn't lift a finger outside of reconciling the books and checking in on your asset occasionally.

Here's the deal if you are considering self-managing - get real honest with yourself to start. Are you becoming a vacation rental owner as a way to offset the costs of owning a vacation home or are you investing in short-term rentals? There is no right or wrong answer here; the reasons to even begin this venture are as varied and diverse as there are vacation rentals. Someone who is doing this to offset the costs of owning a vacation home may be more inclined to self-manage. If the property is purely an asset (investment), then property management is the only way to go (skip adding another job to your resume!).

In any case, I encourage folks to buy only if having the property cover it's costs - including 30% property management, is feasible. That said, it is entirely feasible to self-manage the property and have it not take a lot of time after you get it set up. But that doesn't mean you will always want to - or will be able to, do so. So have the option available regardless of your management choice.

What are the reasons to self-manage? There is only one reason; you are willing to trade your time for money. Nothing wrong there, especially  for those of you seeking to offset your vertical (active) income. Also, self-managing maybe a ticket to material participation, converting passive losses to active - at least in the first year of ownership. but that's a whole other post.

Using a property manager is a great tool to protect your time and therefore, maximize your investment. The key is that the property manager partner aligns with your goals for the property and is focused on ensuring your asset is delivering, both in terms of its potential profit as well as exceeding guest expectations.

If you plan to use a property manager, or are just exploring the options, my new 30-page digital workbook walks you through all the aspects of having a short-term rental, including interview questions for property managers.  You can grab the workbook to kickstart your journey HERE. 

If you choose to take on self-managing, be clear that this is trading your time for money. But, how much time? That's the number one question I get on this topic but its hard to quantify because self managing isn't just day to day; its being a professional - attending meetings, conferences, learning, staying plugged into the industry plus the software and tools to learn, implement, and update.  I estimate is 3-4 hours a week on average, once set up. The set up phase and associated learning is significant. 

Yes, that's it. But, average really means fits and spurts - not a nice, even predictable schedule each week. Plan on visiting the property at least quarterly (honestly, its more like every other month but quarterly is the minimum). What this looked like for me;

1. Learning the software. I started using only one booking platform. I watched the tutorials, spent probably 4-5 hours setting up the property on the platform and got to know the software. I researched other listings to get my listing "just right". I added a second booking site and channel manager after a year (in hindsight, the channel manager automates a lot and would have been great to start out with - I use Guesty for Hosts)
2. Established expectations for a cleaner and schedules. Not only did I need a cleaner, but I needed to have expectations for the cleaner, learn the difference between a turn-over cleaning and a deep cleaning and establish what and when. I had angst about how to manage laundry. I developed checklists and interviewed cleaners until I found one that seemed to work well - and had to fire, deal with unhappy guests, and find another cleaner in the midst of high-season last summer. 
3. Test the systems and processes. Nothing is perfect, so everything got tested and inspected. I followed my cleaning checklist and cleaned the house and tested communications in the software. I updated as needed. I also spot-checked the cleaner by showing up after she'd cleaned and provided feedback. This last piece is ongoing, but it fits in with doing quarterly visits to the property.
4. Maintain. Once I started having guests, I adjusted as needed and maintained. I had to show up occasionally to restock to the house, track when deep cleaning and battery changes were done. I had to ensure lawn care or snow removal was handled etc.
5. Per stay interactions. Each guest stay required setting a door code, arranging with the cleaner, paying the cleaner, and tracking along to ensure the guest had arrived and gotten in. This piece was made imminently simpler and almost fully automated once I got a channel manager. Now all my standard communications are automated - texting the cleaner, emailing the guest, setting the code, etc. This was a big lesson learned and I won't go back - but this was another learning curve and time investment to learn how to use a channel manager and set it up. But once it was done, my time spent with was limited only to one-off communications.
6. When things go wrong. Oh, occasionally things do go wrong. And it rarely fits the schedule. This is where having property management is ideal. I have not had to jump in my car to deal with an issue - yet, but the 11 pm phone call when the door code failed, the heat failed, etc. These things have been rare, but have happened. Then there is the cleaner that quit, the new cleaner who I hired in a pinch who I didn't have time to really train - and it showed. 

Now that I have my system and processes in place, I'm all good with self-managing. I made mistakes, left money on the table but I am vested in the industry and learning all I can - but if I had planned to stay in my previous career, I think professional management ultimately would have been a better option.  That said, I hope to get to the point where my rentals are truly passive and managed by someone else - in the meantime, I'm content with my job as a hospitality manager - and I even do it for others now. 

All that said,  if you are likely to be anxious or stressed out about having that responsibility, then regardless you should ensure you work with a property manager right away.

So, self-managed or professionally managed for you? In the end, it's a personal choice based on your goals and comfort level.

One of the parts I love about my business is helping others get started on their short-term rental investing journey - and leveraging my extensive business background and education to support success through time-tested, business strategies. We just released our 30 page workbook, The Short-Term Investing Roadmap that does just that - it takes you through all the elements of a traditional business plan - in the context of the vacation rental/short-term rental business. So if you aren't sure where to start - start HERE!

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Hey Boss! I'm Kate, owner/founder of The CEO Host. If you are interested in taking a leap into short-term rentals - or struggling with your existing business, my goal - passion, and new career, is to help YOU succeed. I've coached hundreds of folks getting started, analyzed more deals (and duds) than I could count, completed thousands of hours of education and training, attended conferences... So don't be shy. A good CEO knows to bring in expert help - and that's what I'm here for!  Lets HOP ON A CALL and chat!

Categories: : propertymanagement, self management, budgeting