Rental Property Investor · Orlando, FL · Member since 2019 · 109 posts · 49 votes
I live in Oregon and have a long term rental in Central Texas that I'm considering flipping over to Airbnb to generate some more income, and so that when I'm in Texas I can stay there, saving me money. It's a nice home in a great neighborhood and has a hot tub, community pool, etc. and it looks like it will rent well. I've met with some folks who want to manage it (take care of everything). How much should I expect to pay them? It long term rents around $2,100/mo, and they believe it will rent for $200/night, and generate $3k-$4k gross per month (we know we'll hit at least $3k and that's conservative). This would be the monthly average as I know this can fluctuate month to month. If I cover all capex and opex costs, what should I expect to pay them to fully manage? Is it a flat fee, percentage? Any suggestions would be welcome. I saw an old post on BP from 2 years ago. I'm wanting some current numbers with specifics of what is covered in the management. Thank you in advance for any advice! All the best in 2022!! #GOALS
#1 if you are in a neighborhood with a community pool, does your HOA allow STR?
#2 What I see is about 30% fee, that's the tough part...if you hit $3000/month and loose 30% of that, you're back down to LTR rate...plus you probably have extra expenses, like furnishings, utilities, consumables, lawn care, hot tub. Do you think there are seasons for the STR?....so $4000/month 3 months in the summer and low demand winter or would it be steady all year round.
#1 if you are in a neighborhood with a community pool, does your HOA allow STR?
#2 What I see is about 30% fee, that's the tough part...if you hit $3000/month and loose 30% of that, you're back down to LTR rate...plus you probably have extra expenses, like furnishings, utilities, consumables, lawn care, hot tub. Do you think there are seasons for the STR?....so $4000/month 3 months in the summer and low demand winter or would it be steady all year round.
#1 I will look into the HOA rules today, good point, thanks. I know Texas allows them (I was working on a short term in FL last year and it fell through due to zoning back there). Will make sure HOA is ok with it
#2 I ran numbers today and I'd be the same at 3k/mo as I would long term'ing it (paying our friends $300/mo to manage (and upwards from there as the price increases above $3k), but would still need to buy furniture in addition. We do feel 3k/mo is low (50%) and could get months up to $4k at higher occupancy. Also, the benefit for me is that when I'm in Texas working on my self storage items, I could stay there (and my son loves the pool). I think I'm about $300 away from making it work and be beneficial, and that extra will probably get covered in seasonal months but hard to know for sure, we're starting with a conservative estimate to be safe. I've only and always done long terms so still figuring things out. Unfortunately the house is vacant as of today, I wish I had some time.
@Travis Rogers check out sites like Rabbu and Airdna to get an idea of revenue potential and occupancy rates. In terms of management, usually these companies charge anywhere from 25-40% gross revenue for handling bookings, cleaning, website, pricing, repairs, etc. All of this you can do by yourself as an out-of-state investor, but it's your decision at the end of the day. Good luck!
@Jimmy Woodard, thanks Jimmy! It looks like my HOA prevents any leases shorter than 6 months so as of finding this out tonight, it's looking like I'll have to long term this one. I appreciate the info as at some point I hope to have at least one airbnb to diversify a bit from my long term rentals and storage. All the best to you in 2022!
@Travis Rogers I know we spoke yesterday but just saw this question pop up on my feed so thought I would answer haha. @Bruce Lynn is pretty close, and maybe right on the money with some areas/operators. 20-30% is pretty common. Depending on the property and person I am operating for, I would likely be at about 20%.
It can be a hard pill to swallow paying 2-3x more than a traditional PM, but the obvious is that there is much more work that goes into operations and you have constant eyes and maintenance on the property.
@Chris Allen thanks! I agree, definitely much more work to manage than a long term, by far! The texts, weekly or daily onsite items, etc. Well worth the 20-30%, the property just has to pencil out. Thanks again, good chatting with you yesterday! Appreciate the insight!