Wondering whether Airbnb property management is for you? Airbnb properties have some huge advantages over traditional long-term rentals, and you can achieve dramatically more profits than the long-term rental market.
Vacation rental property is a much more hands-on environment than long-term rental properties.
A big decision that goes along with renting an Airbnb property is deciding whether to handle management on your own or hire rental property managers.
***In full disclosure, my wife serves as our own Airbnb property manager and has done all of our own Airbnb management services since Day 1. We also have traditional rentals with long-term tenants, so we understand both worlds.
I have certainly considered a short-term rental manager at times, and below is an outline of my thought process. There is no correct answer for all Airbnb property owners, but after reading this post, you should have a better idea of which route is best for you!
Should you DIY or hire Airbnb property management?
Airbnb property management is more complicated and more time-sensitive than a typical real estate property.
When you have a tenant renting from you for a year or more, they will understand if they don’t have hot water for 12 hours while you replace the water heater.
In the grand scheme of things, that’s a relatively small percentage of their total tenancy. However, if you have a guest staying three nights at your vacation rental, 12 hours without hot water is much more impactful.
Often guests are booking for weddings, important meetings, family gatherings, etc., and having to take a cold shower does not make happy guests. For short-term rental guests, service is king, which in turn protects your revenue.
Why hosts DIY Airbnb property management
- You want to personally ensure that customer service and consistency meet your exacting expectations for all guests.
- You can and will be available to respond to inquiries and questions from guests at all times of the day/night.
- You like the opportunity to keep all of your revenue rather than pay someone part to service your new business.
- You want to have maximum flexibility and control over your listing, calendar and pricing from check in to check out.
- You are confident that you can meet the needs of the guests so that you will earn excellent guest reviews.
- You understand technology enough that you can leverage some of the many tools available to make the Airbnb check in and check out process simple for your guests.
- You would rather have a specific night or weekend at your property go un-booked instead of dropping your rates.
Why hosts hire an Airbnb property manager
- You don’t particularly enjoy the answering questions and providing information aspect of a vacation rental investment.
- Your schedule does not have the flexibility to be available to your guest at all the times that might be necessary, or your just don’t want to be tied to your phone.
- You are comfortable with reduced revenue if it means 5 star guest reviews without you having to do all the work.
- Control over the flow is not necessary for you and you are comfortable entrusting guest service to someone else that is more experienced.
- You either don’t have the experience or desire to ensure that each guest to your property is taken care of and has help available at any time.
- Leveraging and working with technology is not your cup of tea, but you love the potential returns of and Airbnb rental property.
- Your number one goal is to grow your profit and having a professional ensure you have as many guests as possible is very important.
How much is Airbnb property management
Like any other service industry, the pricing for vacation rental property management varies greatly. When you take your car to the wash, they ask if you would like a detail or just a basic wash, and the price point varies depending on the level of cleaning you choose.
If you want the basic wash version of an Airbnb property manager, you will pay a lot less. Should you choose the detailed version of a property manager, you will undoubtedly pay for it.
Property management companies pay you a set rate, which would typically be market or above market rates, with the knowledge they will then sublease the property via Airbnb or another vacation rental platform. You have no direct involvement in the vacation rental; you are strictly a landlord.
This is a viable area for those who may want to bring in higher rents but don’t deal well with the ups and downs.
For the middle-of-the-road car wash, you look to the flat fee structure. This system will typically come with some guidance, tools that you can use, and contacts that you can leverage.
This is a solid starting point for someone who wants to learn the business and needs some guidance truly. Your risk is limited, but you will not have a support team at your beck and call.
This road allows you to enjoy the upside when your property has lots of bookings, but there is no guarantee against a slow down.
You are indeed a vacation rental host with the good and the bad that comes. Flat fees are typically in the few hundred dollar range depending on what type of resources and support the company has available.
They aren’t going to get rich off your property, and it doesn’t benefit them if you have double the guests.
The detail package is the commission-based vacation rental property manager, where they make money when you make money.
Because of this, your Airbnb goals are closely aligned with those of your property manager. The fees for commission-based property management also vary drastically, often ranging from 10%-30% of the net bookings after cleaning fees and Airbnb fees.
Again, even in the detail package, you can choose all the extras or select only the necessary items.
There are a few vital things to consider about the commission-based Airbnb property manager.
They are focused on making money which is great most of the time. However, where that can be an issue is when they drop your prices to maximize bookings.
In my experience managing my own Airbnb’s, someone who books your property for cheap doesn’t think how lucky they are to get a good deal. They think of your Airbnb property as a cheap property and often treat it as such.
For that reason, I will not go below certain prices on each of my properties. Will your commission-based property manager care so much? Lastly, as with the guaranteed income approach, these property managers often own the listing, which means the reviews are theirs, not yours.
What will an Airbnb property manager handle for me?
You may be asking yourself, what does an Airbnb property manager do for me? Well, as discussed above, that varies, but here is a list of things of which at least some a property manager will take off your hand.
- Communication with guests – Airbnb is about service and making someone else comfortable in your home. A structure driven approach to communication is key. If you don’t want to be responsible for that, you should consider a property manager.
- Scheduling and managing cleaning – Cleaning an Airbnb for guests is much different than cleaning your regular house. In order to attract guests to your listing they have to trust that the place will be clean and welcoming.
- Responding to the guest during the stay – A guest may have questions either because they can’t find something, something isn’t working or they just don’t know how to use it. Somebody has to be available to respond quickly.
- Property maintenance – Things will break, and basic preventative maintenance needs to be done to limit future issues. Somebody has to coordinate this, find reliable sub contractors, repair people, and make sure things get done.)
- Setting Pricing – Airbnb and even VRBO have some handy pricing tools, but nothing is perfect. Often their suggested prices are at the low end of the market to encourage as many bookings as possible. If you don’t want the be the cheapest you may need some knowledge and experience.
- Updating Listings – Technology changes and so do rental platforms. In fact Airbnb is always changing things which sometimes requires adjustments to your listing even if nothing has changed.
- Furnish the Airbnb property – Don’t quote me on this but I do believe that some property managers will help you furnish your property and provide design assistance. Again, we have done this on our own but making the right choices is important.
For many, the pressure of not having to address these details directly and receiving a bigger check than a traditional rental property is enough reason to hire a property manager.
To help you make your own decisions, I think it is important to understand why I have never opted for a property manager.
Reasons you should DIY your Airbnb rental property
You will make your own decisions for your own reasons, but perhaps understanding my reasons why will help you decide how to handle your own Airbnb property management in the future.
You prefer control
First and foremost, I am a control freak, and the idea of not being involved top to bottom seems strange and uncomfortable to me.
For that reason alone, I have been very apprehensive about the idea of turning over my business to a 3rd party. This probably shouldn’t be the main reason you choose, though!
You have the time
Secondly, I have the time. I am fortunate that my primary businesses run mainly on their own because I have some great people in important roles.
That gives me the luxury of spending time on our vacation rental business. Once a property is up and running and has some processes in place, the actual amount of time spent on any one property isn’t very much.
However, I fully appreciate that not everyone has that level of flexibility, and it makes sense for them to put their Airbnb property in someone else’s hands.
Third, I have run the numbers, and considering how much time it takes me, I can’t see giving up 20-30% for a hands-on manager. My time is valuable, but having the flexibility means that I would just be taking up some other hobby.
I might as well have a hobby that makes us money and gives us a finger on the pulse of multiple real estate markets.
Fourth, you are process-driven. I preach process and more process in all of my other business ventures. I have saved responses for my Airbnb properties, use the same type of smart lock on each rental property, use the same brand of wifi thermostats, same garage openers, etc.
I put the work in once, and then I leverage the tools around me to make it efficient. If this sounds like you, the DIY approach might be the way to go.
Not everyone is like that, and not being procedure-driven means giving yourself extra work and a lot of heartaches later.
Fifth, I have gotten pretty good at it. Although sometimes you want to hide in a hole because multiple things are going wrong at once, and you can’t seem to catch a break, for the most part, it’s pretty cool to help others enjoy the places that you love.
So what do you think now? I hope that this article has given you enough information to make your own decision on whether Airbnb property management is for you.
Airbnb has room for all different types of people in different situations. Do what feels right for your own home-share experience because that’s all that can be expected.