New to STR management for others and seeking your expert input

[Katie Hartung]

I was contacted to help manage a STR in my market which is Midwest WI as I already own and manage 3 of my own STRs and am doing well with them. Their property has a TON of potential and I can envision it being a great success. Below is the package I proposed to them as they want to be completely hands off when it is furnished. I would be using my own software and doing the day to day. I have never managed anything other than what has been in our own portfolio which is 3 (although we just closed on our 4th and are going to BRRRR it) long term rentals and 3 short term rentals. When I sent this to the property owner he thought the commission rate was too much. Am I completely off base? I am totally open to ideas and constructive criticism as I stated I am new to this and would like to learn from all of you experts:) Thank you so much in advance!

Here is what I proposed:

• Setup fees : Administration Setup:

One Time Fee: $400

Guidebook: Using professional photos give the guests a professional tour of the house and how the home works (Wifi passwords // How to use grill // How to use propane fireplace // Hot tub instructions // Sauna instructions //Check in and check out instructions //where extras may be stored

OTA (Online Travel Agency) setups: taking professional photos and actively updating your listing on popular platforms;

PMS (Property Management System) Setup

Smart Pricing Set up

Website integration

Other (furniture arrangement / design / décor shopping and set up)

$50 per hour

• · Placement fees
• · Marketing Cost: Variable depending on needs/wants for marketing
  • Facebook Ads
• Google Ads
• Cleaners: Set up procedures/take pics of expectations
• · Management fee—30%

Guest communication

Cleaner communication

Setting Rental rate

Dealing with small maintenance issues

Booking Coordination

Smart Lock integration

Keeping supplies stocked (TP, paper towel, all cleaning products, coffee, filters, creamer, sugars, teas,)

(Receipts would be submitted on a monthly basis for either reimbursement or book keeping purposes)

Encouraging guests to leave good reviews by periodically checking in, providing a review template, and ensuring guests receive the amenities they are looking for

Continued marketing

Major Maintenance fees—Owner

• Cleaning and laundry services fees: Cleaning fee to the guest depending on how cleaner wants to charge

[Ken Boone]

So it really depends on your goals.  You need to ask yourself why would you be managing this other person's property?  We have been asked this question a lot ourselves.  We always say no.  Here are some things to consider:

Are you doing this as more of a side hustle or do you want to start a rental mgmt business?

As someone mentioned, 30% might be high in the area, or it might not be.  But you will most likely not be able to get premium rates until you have a proven record in managing other peoples property.   So the facts are that you will only get paid roughly equal to the market rate for this service in your area.  You might also have to look into licensing in order to manage someone else's property and see if that comes in to play and how much that might cost.

The next question, once you realize what your potential cash flow from this will be, is if the time you spend on it, worth the extra cash you will get.  Would that time be more valuable growing your own business or managing others?

So the time it takes to manage someone else property is going to take more time than just managing your own.  You have to now include the extra time spent communicating issues, invoices, etc..with the property owner.

Whether you do it or not is not a right or wrong matter, but you need to understand why you are doing it and if the extra cash will be worth your time.

We have always turned down the requests to manage other people's properties, because I feel like the amount of money I would receive from managing someone else property would not be worth the time to me.  I would rather put that time in growing my businesses. 

Having said that, I don't have a desire to build a property management business, but you might and that would change things.

Hope this helps.