All Forum Posts by: Braedon Page

Quote from @Collin Hays:

Quote from @Braedon Page:

Quote from @Collin Hays:

Quote from @Braedon Page:

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

With my first rental, I had a PM. But they were awful. Constant housekeeping complaints, bookkeeping errors, them using my property for their personal gain without me knowing it, charging outrageous "fees" that they didn't share with me, which effectively lowered my rents, and questionable repairs and maintenance expenses and quality.  I used them for two years before embarking on self-managing.  I started a PM from chance; a couple of owners next to me asked me to manage their cabins, and things developed from there.

Anywho...

A good PM is going to take care of every single detail, with minimum intervention from the homeowner.  A good PM will also make as much or more money, net to the homeowner, than (s)he would on their own.  So if it's a break-even scenario, why hire a PM?  It's all in the value of the owner's time. To earn good money self-managing, the owner has to stay on top of things.  Inquiries, expedient responses for assistance, repairs, and maintenance, frequent rate/yield analysis, etc.  A good PM takes care of all of this. Most folks unhappy with PMs are co-managing their rental with the PM.  That never works. 

In 2020 and for about 3 years thereafter, self-managing was a cinch, because you could do a really poor job and still be flooded with business. That's when the DIY craze took off, folks started writing books, and it was the land of milk and honey.  

Today, we've returned to reality, which is, you've got to work vacation rentals for them to really pay off.  I am absolutely a proponent of self-management, but only if you have TIE.  Time, Interest, and Energy.  If you don't have TIE, and all of TIE, then you are leaving a lot of money on the table by not hiring a PM.  

Not all PMs are created the same. We are a "boutique" PM. We manage 30-40 and leave it at that. I believe Andrew Steffin's operation is similar, perhaps slightly larger. We've got 3 FTEs, and cabin management is their only job, 365/24/7.  And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim: We had about $1.3 million in rental revenues last year, and yours truly bagged all of $32K.  Of course, I don't pay for the company to manage my own places, otherwise I wouldn't be in this business. 

Sorry for my Saturday night soap box; I'm not sure if it answered your question.  

 Hey guys wanted to pitch in here (I'm new to BP), I'm a little confused with your statement Collin. How are you only bringing in 32K from 1.3 million in rental revenues. 

I started my PM company a few months ago with 5 properties projected to bring in 400K a year with our company projected to bring in 70K in gross revenue. 

Can you explain why YOUR margins are so slim?

Already did.  

 Yeah, but then you also said "And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim" which is probably the most untrue statement.  

You do you. 

Genuinely curious though - your profit is around 2.5% of your total revenue. Is there not a way to boost that without charging junk fees and using VA's? What kind of management fee are you charging?

 We charge 20%.  I have three full time people (other than me) that run day to day operations.  That’s a lot for 30-40 properties but that’s the way I set it up and want it.  

I am a demanding homeowner myself and assume the same of my clients.  We’ve never lost a client to another management company in 19 years.  

Ok, those numbers make a lot more sense. Do you find yourself dedicating a lot of time to the business personally or is it almost entirely passive for you with your full-timers handling 99% of the day to day?

I primarily handle the marketing and rates.  And homeowners are able to reach me anytime they want - they have my cell number.

 Wow - that's definitely far beyond what most PM's offer. Impressive

Quote from @Collin Hays:

Quote from @Braedon Page:

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

With my first rental, I had a PM. But they were awful. Constant housekeeping complaints, bookkeeping errors, them using my property for their personal gain without me knowing it, charging outrageous "fees" that they didn't share with me, which effectively lowered my rents, and questionable repairs and maintenance expenses and quality.  I used them for two years before embarking on self-managing.  I started a PM from chance; a couple of owners next to me asked me to manage their cabins, and things developed from there.

Anywho...

A good PM is going to take care of every single detail, with minimum intervention from the homeowner.  A good PM will also make as much or more money, net to the homeowner, than (s)he would on their own.  So if it's a break-even scenario, why hire a PM?  It's all in the value of the owner's time. To earn good money self-managing, the owner has to stay on top of things.  Inquiries, expedient responses for assistance, repairs, and maintenance, frequent rate/yield analysis, etc.  A good PM takes care of all of this. Most folks unhappy with PMs are co-managing their rental with the PM.  That never works. 

In 2020 and for about 3 years thereafter, self-managing was a cinch, because you could do a really poor job and still be flooded with business. That's when the DIY craze took off, folks started writing books, and it was the land of milk and honey.  

Today, we've returned to reality, which is, you've got to work vacation rentals for them to really pay off.  I am absolutely a proponent of self-management, but only if you have TIE.  Time, Interest, and Energy.  If you don't have TIE, and all of TIE, then you are leaving a lot of money on the table by not hiring a PM.  

Not all PMs are created the same. We are a "boutique" PM. We manage 30-40 and leave it at that. I believe Andrew Steffin's operation is similar, perhaps slightly larger. We've got 3 FTEs, and cabin management is their only job, 365/24/7.  And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim: We had about $1.3 million in rental revenues last year, and yours truly bagged all of $32K.  Of course, I don't pay for the company to manage my own places, otherwise I wouldn't be in this business. 

Sorry for my Saturday night soap box; I'm not sure if it answered your question.  

 Hey guys wanted to pitch in here (I'm new to BP), I'm a little confused with your statement Collin. How are you only bringing in 32K from 1.3 million in rental revenues. 

I started my PM company a few months ago with 5 properties projected to bring in 400K a year with our company projected to bring in 70K in gross revenue. 

Can you explain why YOUR margins are so slim?

Already did.  

 Yeah, but then you also said "And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim" which is probably the most untrue statement.  

You do you. 

Genuinely curious though - your profit is around 2.5% of your total revenue. Is there not a way to boost that without charging junk fees and using VA's? What kind of management fee are you charging?

 We charge 20%.  I have three full time people (other than me) that run day to day operations.  That’s a lot for 30-40 properties but that’s the way I set it up and want it.  

I am a demanding homeowner myself and assume the same of my clients.  We’ve never lost a client to another management company in 19 years.  

Ok, those numbers make a lot more sense. Do you find yourself dedicating a lot of time to the business personally or is it almost entirely passive for you with your full-timers handling 99% of the day to day?

Just speaking to the first point, you can definitely hire a property management company to handle your airbnb. I run a property management group on Oahu and that's what we do, there are many similar services in almost every market. 

You can also hire a company simply for cleaning and maintenance, but you will be actively managing them, communicating with the guest, scheduling the cleanings and repairs, etc. This is far from impossible and many people have a lot of success managing their own STR, but it sounds more involved than what you're looking for. I'd search for a quality PM focusing on STR's in your area, make sure they have good reviews and transparent pricing, and go with them. Best of luck!

Quote from @Shawn McCormick:

@Hyokyung Woo I specialize in STR near Disney and have helped dozens of Bigger Pockets members purchase homes here. I'm actually meeting two and showing vacation homes tomorrow and Thursday to members.
I’d be happy to share my knowledge of which communities you should consider as well as explain the nuances of owning here in Orlando. 

Please check my profile for a link to schedule a call.

Best of luck, looking forward to hearing from you.

What are STR regulations like in that area?

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

Quote from @Chayton Wagner:

Quote from @Collin Hays:

With my first rental, I had a PM. But they were awful. Constant housekeeping complaints, bookkeeping errors, them using my property for their personal gain without me knowing it, charging outrageous "fees" that they didn't share with me, which effectively lowered my rents, and questionable repairs and maintenance expenses and quality.  I used them for two years before embarking on self-managing.  I started a PM from chance; a couple of owners next to me asked me to manage their cabins, and things developed from there.

Anywho...

A good PM is going to take care of every single detail, with minimum intervention from the homeowner.  A good PM will also make as much or more money, net to the homeowner, than (s)he would on their own.  So if it's a break-even scenario, why hire a PM?  It's all in the value of the owner's time. To earn good money self-managing, the owner has to stay on top of things.  Inquiries, expedient responses for assistance, repairs, and maintenance, frequent rate/yield analysis, etc.  A good PM takes care of all of this. Most folks unhappy with PMs are co-managing their rental with the PM.  That never works. 

In 2020 and for about 3 years thereafter, self-managing was a cinch, because you could do a really poor job and still be flooded with business. That's when the DIY craze took off, folks started writing books, and it was the land of milk and honey.  

Today, we've returned to reality, which is, you've got to work vacation rentals for them to really pay off.  I am absolutely a proponent of self-management, but only if you have TIE.  Time, Interest, and Energy.  If you don't have TIE, and all of TIE, then you are leaving a lot of money on the table by not hiring a PM.  

Not all PMs are created the same. We are a "boutique" PM. We manage 30-40 and leave it at that. I believe Andrew Steffin's operation is similar, perhaps slightly larger. We've got 3 FTEs, and cabin management is their only job, 365/24/7.  And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim: We had about $1.3 million in rental revenues last year, and yours truly bagged all of $32K.  Of course, I don't pay for the company to manage my own places, otherwise I wouldn't be in this business. 

Sorry for my Saturday night soap box; I'm not sure if it answered your question.  

 Hey guys wanted to pitch in here (I'm new to BP), I'm a little confused with your statement Collin. How are you only bringing in 32K from 1.3 million in rental revenues. 

I started my PM company a few months ago with 5 properties projected to bring in 400K a year with our company projected to bring in 70K in gross revenue. 

Can you explain why YOUR margins are so slim?

Already did.  

 Yeah, but then you also said "And to give you some context on how "rich" the PMs are getting, in case you are wondering for your own PM business, the margins in this business are incredibly slim" which is probably the most untrue statement.  

You do you. 

Genuinely curious though - your profit is around 2.5% of your total revenue. Is there not a way to boost that without charging junk fees and using VA's? What kind of management fee are you charging?

Quote from @Mya Toohey:

I see your thought process on the split. She wasn't planning on making any money. You need to check out the local rules and regulations before you get too ahead of yourself. Make sure that the property is allowable and that the returns are good. You could end up investing money for it not to even be a good fit for STR. I am in the Tampa Florida area and we have very stringent rules and regulations all around where I am.

Definitely second this - if you were thinking of taking 65% for yourself I would imagine you're pretty new to the STR management space (not a criticism, just an observation). STR regulations are a big consideration before you make any big capital improvements specifically for short term stays, also running your numbers and making sure that your area offers consistent returns above what you'd get renting it long-term. Generally STR's make more, but if you run your numbers and it comes back similar to your LTR numbers, I'd go with a long-term tenant for stability and less work.

Quote from @Braeden Cobb:

Quote from @Mat O'Grady:

@Forrest Williams@Bjorn Ahlblad

Thanks for the thoughts. I'm trying to find out where I can get  a good quality murphy bed. 

Hey! Have you ever thought about a higher end electric Murphy bed? This bed actually rolls up behind cabinetry! I actually had one installed in our vacation rental and the feedback has been great! 

 What does something like that cost?

Any particular area in the states you're looking at? What's your budget and targeted returns?

I haven't personally house hacked a room, but I do know some people who have. I also manage STR's on Oahu so I have some perspective from that side.

The short list of pros and cons would be that you'll make more from STR, but it will also require more work.

MTR will be less work than STR, and potentially get you higher returns than LTR, but won't provide the stability of a long term lease.

LTR will probably be the least profitable, but also the most stable and least amount of work. 

Best of luck!

If you do decide to list it as an MTR, furnishedfinder is a solid platform to use in addition to the normal OTA's

"Saturated" is a bit of a throwaway term IMO - I manage STR's on Oahu and while Hawaii is about as "saturated" as it gets with STR's, people are making great returns on the right investments. That being said there are also bad deals in any area, here included.

I would run your numbers based on historical data from airbnb - pretty easy to check on airdna or even just going in the airbnb app and seeing not only what nightly rates look like for certain properties but what their occupancy is - from there you can estimate monthly revenue with a reasonable degree of accuracy and see if that lines up with your targeted returns. Also, most decent STR property managers will be happy to offer projections for properties, or even realtors who do a lot of STR business as well. I would advise taking these with a grain of salt because some can overpromise, but if you ask them to show you the data behind the projections this can also be a way to accurately project what your returns will be.