Operating a vacation rental business is no stroll on the beach. Maybe you’ve purchased your first vacation home and want to recoup your investment. Or perhaps you already own several properties and are tinkering with the thought of a larger-scale operation. Either way, you’ll need to do some research to learn exactly what you’re getting into, and then devise a plan to accomplish your goals. The first question you’ll want to answer when devising your plan is whether to hire a property manager or self-manage.
How Would I Manage?
If you opt to self-manage, you will be solely responsible for every aspect of the process, from marketing to maintenance. If you choose to hire a property manager, you will forego some of the profit, but also a huge chunk of the responsibility. While there are many variables to evaluate, consider the pros and cons below before you make a final decision:
Pros of Managing it Yourself
You Care More About Your Property: Homeowners who self-manage are often able to devote more time than your average manager to optimize the property for maximum appeal. By taking just the right photos and adding your own unique touches, you can generate a higher return on your investment than what you’d earn from a management company. This comes at a cost, however, and many homeowners simply cannot maintain this level of service forever.
Learn The Art of Hospitality: Homeowners who self-manage will learn about building a hospitality business. You’ll learn how to set up systems to optimize your operations. You’ll learn how to create a killer profile, how to write guest reviews, and how to get more bookings through SEO. You’ll learn how to decorate your property, how to attract repeat visitors, and how to handle unruly guests. When problems do surface, you’ll learn how to ensure that they’re handled professionally and in the most cost-effective manner. This can turn into a fun side project for the right person.
Build Closer Relationships with Guests: Another benefit of self-managing is that you will be able to meet some fascinating people. As a result, you will establish a more interpersonal connection with your guests. It might also encourage them to treat your home with more respect, since they can see that you’re personally keeping tabs on the space!
Cons of Managing it Yourself
There’s a lot to Do: According to Businesswire, the average homeowner spends an estimated nine hours per week managing their vacation rental. From onboarding guests to answering online inquiries to overseeing maintenance, there are a laundry list of responsibilities! This may mean you signed up for more than you bargained.
It’s No 9 to 5: Homeowners who self-manage are often surprised to learn that they need to be available 24/7 to respond to guest inquiries. Be prepared to answer quickly to any outstanding requests, even when you think you’re off the clock!
You’ll Make Mistakes: Trials by fire often leave you burned. Early on, you may fail to meet all of the legal requirements that apply to your property. You may not be aware of certain accepted procedures across the rental industry. If you don’t live in the area (and sometimes even if you do), you may have to cycle through multiple cleaning, lawn care, or maintenance companies in order to find reliable contractors. Finally, you may simply not know how best to recoup losses sustained due to rental damage.
Pros of Hiring a Property Manager
They Absorb a Ton of Stress: You won’t have to sweat the small stuff when you hire a property manager. If the power goes out or the water heater dies, your representative will get the call. You can enjoy REM-heavy nights with your ringer on silent.
They Free Up Your Schedule: When you engage a manager, you’re buying yourself time. A property manager will screen potential guests, manage your listings across third-party travel sites, stock your home with the essentials, and respond to guest inquiries.
They Know the Local Ecosystem: Any property manager worth their salt will know the ins and outs of the local market. This comes with a host of benefits, including insight into the culture and community, ideas to target area tourists, and best practices for handling thorny tax or legal regulations. Finally, many managers will have preferred relationships with local vendors to help you hire the best pool cleaner or repairman.
Cons of Hiring a Property Manager
You’ll Have to Share in the Upside: Vacation rental management fees range from 25-30% of total revenue. Some managers charge a lower rate of 15-20%, depending on property size and location. While fees can vary, this cost can obviously add up. Don’t let this be your only consideration, however, as a professional manager can often drive higher returns than an individual homeowner.
You Might Pick a Dud: Finding a property manager can be a painful process. It can be grueling to comb through online reviews to determine which manager has the best reputation. This challenge is only compounded because many reviews on Yelp and Google are written by guests and tenants, not homeowners. Despite what’s promised on a website, you might end up with someone who isn’t professional, trustworthy, or responsive. (Spoiler Alert: this is where Topkey can help! Scroll down to read more.)
These are just some of the considerations on whether you should hire a property manager or self-manage. Self-management might be the answer if you know that you have the time, energy, and patience to take on the job. Property management might be more your style if you know that you live too far away or can’t oversee things yourself. Regardless of your decision, we can help you make a more informed one. At Topkey, we help homeowners find and compare local property managers at a glance.
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Still not sure whether to hire a property manager or self-manage? Check out the below article on why you should consider a vacation rental property manager.
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