What are the STR management options?

Question

It seems like a lot of people in BP nation like to self-manage STRs. Nothing wrong with that, but for me no thanks. I have managed LTRs for decades and no longer want to manage anything. Maybe a fishing pole. I have no interest in being tethered to my phone/computer because I need to respond quickly to any inquiry or lose rank. [Rant edited out.] No thanks.

Here are the options as I see them:

- co-manage/co-host with another local owner. This seems hit or miss (adds risk, potentially lots of risk?)

- hire a licensed local property management company (LPMC) who already manages a bunch of properties and realistically can book my place better than I can

I'm looking for more options because it seems like there should be more. Lots of recreational places, including where I'm looking, have repeat clients/customers year after year. With a LPMC I can tap into the LPMC customers right out of the gate.

When you post, let me/us know if your chronological age plus your real estate experience is greater than 100 years like me. My guess is that if you could walk a mile in my shoes, you wouldn't have any questions.

Luke Carl · Answer

I have more real estate than I’d care to mention on the internet. Full time. Financially free. Blah blah blah.
There’s no way I’d use a manager on short term. It’s just not how it works. Hire someone in house if you must. I have two full timers in charge of my short terms.

Also, you don’t want to respond at all hours. If you do that you’ll get walked all over. Have to let them breath.

If what you’re doing is working for you Id recommend you stay put. Short term is for the obsessed and the engineers.

Easy to say for the guy that’s taught several thousand people how to do it themselves lol

Collin Hays · Answer

As a property manager in the Smokies, I always advocate self managing, as long as you have TIE.  Time, Energy, and Interest.  It's a part time gig.  But if you are missing any of these three, you become biggest obstacle to the success of your investment.  No competitors will threaten your investment as much as your own lack of interest, laziness, or ineptitude.

Either manage it, hire someone to manage it, or buy a good mutual fund.  If you are not committed to seeing that it's properly managed - by you or someone else - you're wasting a lot of time and money.

Dan H. · Answer

My age plus experience approaches the 100 years but not quite there.  We have had STRs since 1999 which I suspect places me as a  very veteran STR investor.

We self managed our LTRs.  We used to self manage our STRs 20 years ago, but have used professional management on our STRs for many years.  Managing STRs is significant work.  If you desire a job, self manage your STRs.  You will have significantly better cash flow. In my market the typical STR PM fee is 25%.  There are STR managers down to 18%, but there is typically a reason these PMs have lower fees.  the PM fees add up.   However, I do not want a job as an STR manager.

My view is when you are younger and the cash is more tight, it makes more sense to self manage. When you achieve a certain level of financial freedom, self managing is a choice.  Note for my LTRs, I chose to self manage, but for the STRs I choose not to self manage.  I would only self manage the STRs if I found it rewarding/fun (basically why I self manage the LTRs, but I may start to off load some of the to a PM in the near future).

You need to decide if you want a job as STR manager to save the PM fees.

good luck

Leslie Anne Morris · Answer

I am with you on not wanting to self-manage an STR!  It is buying yourself a job basically.  Yes, to everything you noted.  Really important to note that the marketing in a hot market can make or break your business.  Making sure the company is properly licensed is for sure the first step.  I have heard of the co-managing game, and I am not a big fan of that one.  I would think there would be risks, I think they get around any licensing based on not having to do trust accounting (funds are still deposited directly to the owner who then pays the co-host via Venmo or whatever).

Your experience far outweighs mine I am sure!  I have 9 STR in the Smoky Mountains and 2 in other states.  I have several licenses (agent/property manager) and was a commercial real estate lender for 20 years so the underwriting is my wheelhouse.  Maybe I can get to 100 with it all?  My main goal is to educate experienced investors on this asset class, point out the scaling upside when you DO NOT self-manage, and present a viable opportunity for folks to learn and grow, particularly women (only 31% of whom make up all real estate investors).

Glenna Wood · Answer

110+ years... More options you say? I doubt it. Those repeat clients have been cultivated  over years. Doesn't make the management job easier other than your renters are already somewhat vetted. In 40 years if I didn't self manage, I hired a PM. Too many wannabees now to vet for a co-host from my view. My last STR is listed for sale now. Too complicated to leave to multiple heirs but stocks and bonds are easy to slice up. Best wishes.

Michael Baum · Answer

I am an engineer. :)

John Underwood · Answer

For your situation find a sucessful local licensed PM and talk with them as well as a couple others and pick the best one.

What are the STR management options?

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