All Forum Posts by: Jennifer Moraski

One other thing to consider is if the space is a duplex for a LTR then there may be additional regulations to make it conforming. You should also check if duplexes are allowed in your zoning. For example, we are finishing our basement to make it a separate unit and there needs to be a firewall between the basement and the main house (basically 2 layers of drywall). There also needs to be a separate entrance, adequate parking, etc.  We did create separate meters for electrical but it’s not necessary. We also want it to Have it’s own mailing address. When you sell the house having a conforming 2nd unit would be preferable.

Agree with the others to look at the regulations and the numbers for both scenarios. 

I'd lean towards an STR though given the shared laundry and not as much separation from the rest of the house. Paying all the utilities is what you do now so not a big deal for the STR and sharing laundry with someone for a few days is different than for months on end. Is there a way to lock that area so renters couldn't go to your part of the house? For safety purposes that would be necessary. Let us know what you decide!

Jennifer

 I’ve considered taking over the cleaning but realistically I’m sure my experience would be similar to yours. I get annoyed every time I’m there that furniture is moved, towels are in the wrong places and random things go missing.  I try to let it go but it’s hard.  

Quote from @Collin Hays:

Self management is the way to go if you have TIE.  Time, Interest, and Energy.  It's a part time gig.  

Even with your management fee, it's going to be hard for you to net what you do with a PM, assuming they do a good job.  Number one, when you add up all of your fees to list on VRBO or Airbnb, you are at 10-12 percent immediately.  So you aren't saving 30 percent.  You are saving 20 percent if you are lucky.   

You will also lose a lot of money over the course of a year due to opportunities lost, and opportunities cost.  

Case in point:  We had a guest check in on Sunday to one of our cabins.  A weeklong stay.  But their modem went out which meant no internet or TV.  So the stay was in jeopardy.  First thing Monday a.m., our manager drove 120 miles round trip to Knoxville to the Xfinity store, and had everything up and running by about 2pm.  I am 1,100 miles away.  Had I been self managing, I would have lost the $1800 stay and been struggling to get a replacement modem installed.  That's big money to me.

A PM can fix things immediately that a self manager gets to fuss over remotely, while their rents are in jeopardy:  Refrigerator, oven, microwave, dishwasher repair, heating/air issues, rodent infestations, lock-outs, TV/internet, plumbing, septic, snake in the house, broken chair or table, tree fell over into the driveway, you name it.

Everyone wants to say "Gee I'm saving all of my PM fee by managing myself."  That may technically be true, but there is a lot more to that story.

 I wouldn’t do it solely to save money.  I do think they add a lot of value and have generally been happy to pay them the last 5 years. But now I do have time, want to learn and manage it myself and are nearby so if there is an emergency we are nearby.

They moved to dynamic pricing a couple years ago and I’ve been impressed with the results. During peak times my cabin will rent for hundreds more a night. 

Quote from @Ryan Moyer:

30% is a lot.  Though different depending on how much the revenue actually is.  Probably worth it to look at the actual dollar amount and figure out if that amount of work is worth it to you.

If it's doing $20,000 annually then maybe the $6,000 is worth it to you to have it be completely passive.  If it's doing $100,000 annually then paying $30,000 for something you could do yourself for a lot less than $30,000 worth of effort.

It sounds like you're planning on managing some other listings already anyway.  I don't think it makes sense to have 1 of multiple properties passive when the rest are going to be active anyway.  Especially for 30%.  The hard part is getting everything figured out.  Once you have that, adding another property isn't that much more work.  So if you're going to be doing the hard part anyway, why pay $30k/yr to avoid doing the easy part?

Maybe see how it goes with the new listings you're planning on doing and once you're into it, if you've decided it's not that bad to save an extra $30k or whatever it is, you could pull the trigger on this property at that point?

 It is partly to save money but it’s more about control and learning to manage it on my own. I’ve paid $20k to them this year so far and that feels like a lot for what I’m getting. 

BTW, in our area Vacasa is the low service PM that many people use and I believe it’s 10-15%.   When I initially called around the management fee ranged between 27-35%. 

Quote from @Dave Stokley:

Do you want a job or an investment?

Ha! Yes, exactly. Probably job.  We rent out our travel trailer and I manage that. We are refinishing the basement of our house and we’ll rent that out and I’ll manage that. And on top of that I have another STR investment that I plan on self managing so I think I have my answer. 😀

Quote from @Joel Case:

Are they the hosts or co-host on the STR platforms? Because if it's under their account, you will have to start a new listing and lose all of your reviews and any special host perks. I have one STR and work full time, but I still self manage, so I have no doubt that you could easily do it. I studied a month or two using the forum, read Short Term Rental, Long Term Wealth and feel I was fully ready to tackle it on my own.

What concerns do you have about managing it yourself?

Yes, they are the hosts so I would lose all those reviews and any other benefits they have.

My concerns are the hassle of switching and having to set up and find all the services (garbage, housekeeping, etc), new pictures and re-listing on all the platforms and the day to day handling of requests.  

Did you manage yours from day 1 or did you use a PM then switch to managing it yourself?

I own a single Cabin in a vacation town in WA state that I use as a family vacation home and STR. When I first bought it 5 years ago I lived 2 hours away, had never owned an STR before and worked full time so it made sense to pay 30% for a local PM to manage it. Fast forward, I now live 30 minutes away, don't work and have more experience, knowledge and local contacts. I'm not totally unhappy with my PM, but have been annoyed with little things more and more. For example, all my nice throw blankets disappeared this summer. I mentioned it to them and they said they'd look for them in the off site storage and they are still gone. I emailed them again and no response. They also put a lock on a hall closet without telling me. Last spring the grass wasn't mowed and not until I contacted them did they say they didn't have a lawn service lined up. We took over the mowing. I could go on. However, on the plus side, the place is booked solid, I have great reviews and have made a good amount of money. They take care of all the guest interaction, housekeeping, marketing, pictures, snow removal, etc.

Do I take over the management of it myself or continue using them? The hassle of switching and setting up all the services (housekeeping, hot tub service, garbage) is what gives me pause. 

Appreciate any feedback!

Thanks,

Jennifer

 I’m sure YMMV, but in my area 30-35% is common, so no. If you are looking at it just from cost, do it yourself. 

I haven’t used them personally but in our rural area it’s also a mixed bag with a lot of unhappy owners due to inconsistent service. I’m constantly getting letters from them asking me to switch. Look carefully at the services they offer and then also look at what a local property manager will provide, compare what they charge, then make a more informed decision. I think the most useful thing my local PM supplies is the local services (housekeeping, hot tub servicing, snow plowing, etc.). 

Good luck!

Jennifer