Self managing a vacation rental?

[Brandi Carballo]

I own some residential rental properties that I manage myself and am considering buying a vacation rental to add to my portfolio. I live in Oregon and am looking at the Oregon coast because I know demand is there for vacation rentals and I am familiar with the area. I have identified 2 properties and ran the numbers, they both look good with one being in a slightly better location. They are about 1 hour away from my home.

I would prefer to self manage the properties, but hiring a local cleaning company for turnovers. Does anyone have experience with this in similar circumstances? How does it work out? What are issues I may run into?

I plan on using keyless entry (number pad I would text/email code to the renter the day of check in) so I don't have to get them a key. The lock I want does have a keyed entry option as well, so I have that for backup. I have rented vacation rentals in the area I am looking at where the management uses this and I really liked it from the customer's perspective. 

I would love any ideas/input/advice!

[Kendall Luelf]

Brandi Carballo

I own and manage 2 vacation rentals located in TN from my residence in IL. It works great for us but you must develop a trustworthy team including cleaning personnel and pretty much every aspect of maintenance that the amenities in your cabin would require (hot tub tech, fireplace tech, hvac tech, plumber, etc...).

We've been lucky and have great people and great cleaners with great communication. It also helps that my wife doesn't work and is able to field inquiries as needed. The management part isn't too time consuming as long as you have good people to handle the issues, but there are times when it is very daunting because as in life, it seems when one thing goes wrong, several other mishaps follow. At first it may seem overwhelming but you'll quickly develop a routine to handle inquires, refunds, schedules, etc...

If you start your own website and marketing campaign (highly recommended), the process becomes much more time consuming. Timothy made good points but managing out of state is not impossible by any means. Factoring in management fees isn't a bad idea in the case of becoming incapacitated because you really never know but it's not something we personally do which may or may not be a mistake but it is what it is. I do know that a lot of times, once you factor them in at a typical rate of 30%-40% , it's hard to be profitable. There is definitely a risk reward aspect to owning vacation rentals as with any business so I don't think it's wrong to run the numbers based off of you managing it instead of a management company. If you were opening up a restaurant, you would run the numbers based on you overseeing all operations (of course you'd have managers but probably not to the extent of overseeing all aspects of the business). I use this mindset with vacation rentals IF they are being used as investments because it is a business...it just so happens to be a business that has the option to be hands off. In my opinion, if you want to be profitable, you need to be hands on and that's exactly how I'd run the numbers.