Airbnb - how much do you pay yourself?

Question

I have a cousin who self manages several Airbnbs but he doesn’t have much free time and several clients trying to decide how to use their multi family properties. STRs do well here in Alaska, but that’s also when we want to enjoy the sunshine and fishing!

If you self manage your STR (as most people do) or just set everything up on the front end, do you record how much time you spend on it? How much is your time worth? I'm not asking that to make a point- literally- what number goes into your spreadsheet? .

When trying to decide if you want to use a rental property for a STR vs MTR vs LTR you need to know these numbers, because the time you extra you spend working on the STR could've been spent earning money elsewhere. If you add this time into your expenses for the investment (instead of working for free) it brings the cash flows for STR vs LTR closer together.

When you scale, this becomes an even bigger issue. Also, if anyone on here hires someone to run their Airbnb I’d be curious how they structure their fees. Meeting a new colleague who is just getting started managing and curious how others approach it or think about it. @Jamie Rose @Tyler Cobb @Kaiden Foster

John Underwood · Answer

I mainly write checks so it's easy to see my net.

We are doing some spring cleaning and small things at out Lake House.  It is a labor of love so I'm not worried about a little time here.

Plus I have invested in enough properties so that I don't have a day job anymore and I can come and go as I please and not have to answer to anyone (Don't tell my wife I said that)

Ryan Moyer · Answer

If I take my hours I tracked for material participation (not exact, but the best measure of time spent that I have available) my hourly rate for running my STRs was around $280/hr.

I am more hands on than most (don't mind getting those extra hours for material participation and the tax benefits along with it) so I would imagine others that are cash flowing well and only spending a couple of hours per week are able to claim much higher per hour.

To answer your last question, there are various ways managers can structure fees but BY FAR the most common is that the host/manager takes a percentage of revenue as commission.

Ken Boone · Answer

I mean yea that's a good question, but the answer will be different for everyone.  Everybody has a different time worth and so that it why it is a personal question.  I know folks that are happy to make 1k month on their STR, and I mean just thrilled with that.  If that is all I was making it would not be worth my time to manage my STRs.  My LTRs on the other hand,  I let a management company handle.  They get 8%.   For the minuscule 8% that I pay them to manage, I do like almost zero work.  A couple calls I have to answer a year from the management company about a repair or something like that.  Yea so in that case, my time is worth much much more than that 8%.

The difference with my STRs is that they make significantly more than my LTRs, they absolutely take more time to manage, it is a business.  However, it is worth it for me to manage them due to the income produced.  But that number is going to be different for everyone depending on where they are in life.

Mark Miles · Answer

I use offshore assistants to manage everything. Then I pay myself 100% of the profits. Easy peasy

https://www.biggerpockets.com/...

Drew Sygit · Answer

Great question!

Kaiden Foster · Answer

It's all about processes. IT is possible to manage short term rental and keep the quality high, there are just so many larger STR management companies that are only concerned about their bottom line. I'm trying to fix that for the Anchorage/Wasilla market. I get why LTR managers don't touch STRs. It requires completely different processes and more day-to-day oversight of your team. And when quality drops, things go downhill quick.

Leslie Anne Morris · Answer

This is exactly why I’m a big proponent of getting a knowledgeable property manager in your market. That way you can invest to scale and you aren’t trading your time for money.

Andrew Warner · Answer

I have 18 units but they are all on the same property. We have a team of about 7-8 during our season (April - Nov) and then are closed for 5 months. I spend about 15 to 20 hours a week during peak months and about 3-5 hours a week during the off season on phone calls remotely. The net is between 250k-300k depending on the year. I'd guess it comes out to about $375 per hour if I tried to pin it down. That's not counting principal pay down, appreciation or depreciation. I am currently looking for a new project to work on, whether that means eventually selling the hotel and going bigger, or adding something to simply keep busier.

Michael Baum · Answer

We just pocket the net and pays da bills. We don't do enough to meet the hours going over. We did track it at first but never really came that close.

We do go over in the spring and do maintenance. Every other year is bigger. This is a big year. Restain the decks, really clean the beach of logs, paint outside touchups, that sort of thing.

Airbnb - how much do you pay yourself?

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