Should I hire a property management company for my STR?

[Daniel Tisdale]

Hi all,

I am doing my first long-distance Airbnb property in West Palm Beach and I am wanting to get everyone's thoughts on whether or not they would recommend hiring a property manager. I live in Austin, TX, so I wouldn't be able to respond to emergencies, but also know how much having a property manager might cut into my profit potential.

Would love to hear feedback from anyone who has thoughts on this!

Thanks,

Daniel

[Collin Hays]

I own a property management company, and I always recommend self managing if you have the time and will to do it right. It's a part time job.  If you have the time, and don't get paid at least that much doing something else, then I recommend it.  Yes, there are automations that can help you, but no automation takes care of a brand new bee hive under the front deck, or the air conditioner that broke down when it was 95 degrees out.  If those things aren't taken care of, and quickly, you just kissed goodbye 3-4 nights of rent straight away.

And just because you self manage doesn't mean you make more money.  We took on a client about 18 months ago who is an attorney in Philadelphia.  He and his wife self-managed, and they averaged about $15,000 a year on their rental. But they are both professionals, and calls about stopped up plumbing or a snake in the dryer (we've had calls on both of these things in the last two weeks) sometimes come at very inconvenient times.   He wasn't real keen on the idea of giving up 25% of this rents to pay us.

Like we do everyone, I offered him a 6 month test drive for no fees whatsoever.  Well, we booked $21K in that six months, which already paid him more than what he had done on his own in a full year.  This year, it's on track to do around $43K, meaning low $30s net to him.

Even assuming he could do $43K on his own, is it worth his time to spend 5-10 hours a week screwing with a vacation rental to pocket another $800 a month?  Not to him.

But if you are a DIYer, there's all sorts of ways you save money.  Mow your own lawn, change your oil, iron your shirts, bathe your dogs.  It's all a matter of what your time is worth.