All Forum Posts by: Joe Kern

Hello All! 

Seeking insight from the community on converting a STR (primarily Airbnb) to long-term rental. Considering the change as the STR numbers just aren't working, especially with the associated expenses and turnover frequency. Are there tools (i.e RentRedi) that you recommend using for LTR tenant screening, rent collection, background checks, etc? Any "gotcha's" to look out for when converting to LTR as opposed to STR?

Investment Info:

Single-family residence buy & hold investment.

Single family rental in manatee county Florida.

What made you interested in investing in this type of deal?

Location

How did you find this deal and how did you negotiate it?

Researched the area , contacted local team through biggerpockets

How did you finance this deal?

Second home loan , conventional

How did you add value to the deal?

New game room, backyard turf , new appliances , paint , etc

What was the outcome?

Currently active STR

Lessons learned? Challenges?

Hiring a PM is more expensive than anticipated. Always underwrite conservatively

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes

Hello All -  unfortunately, hurricane milton is fast approaching the Tampa area. Aside from the obvious dangers, I’m seeking best practices and how experienced investors  in this area handle hurricane damage? What is the best way to assess and submit for claims with insurance with least resistance from the insurance company ( assuming it’s not a smooth process. I’m a new investor in FL and seem to have just invested in time for a major Hurricane to hit directly :( 

any advice is much appreciated!

Quote from @Joe Kern:

Quote from @KiKi Wood:

We manage 60+ rentals in Indy. We charge around 18% for our services, and that is off of the gross revenue. We take the cleaning team fees and pay them directly to our cleaning team. We also have a ~$100/month tech fee that builds in all of the subscriptions we use for each property (Ring cameras, Minut sensors, Price Labs, etc.). I feel that what your property manager is asking is pretty fair, and a standard practice!

Thanks Kiki for confirming! that is my sentiment currently as well, just wanted to ask others in the forums! Much Appreciated! 

 congrats on the 60+ properties that is quite the portfolio!

Quote from @KiKi Wood:

We manage 60+ rentals in Indy. We charge around 18% for our services, and that is off of the gross revenue. We take the cleaning team fees and pay them directly to our cleaning team. We also have a ~$100/month tech fee that builds in all of the subscriptions we use for each property (Ring cameras, Minut sensors, Price Labs, etc.). I feel that what your property manager is asking is pretty fair, and a standard practice!

Thanks Kiki for confirming! that is my sentiment currently as well, just wanted to ask others in the forums! Much Appreciated! 

Quote from @Tim Baldwin:

18-22% management fee is common in Florida for vacation rentals. What I question is the cleaning cost bringing your cost to 30% of the rental income...?

 Hey Tim - sorry for the delayed response! Yes - cleaning cost + lawn care +pool care + county taxes all coming out of the host payout in addition to the 18% PM fee.. so quite expensive before I see any net payout

Quote from @Joe Kern:

Hello All - just finished setting up and putting my first short term rental live on Airbnb. I just rented out most of the previous month , and agreed to pay the property manager 18% of the booking fee host payout so net of any guest service fees or occupancy taxes airbnb takes.  Now - I just noticed they are taking 18% of that (total payout)  which is inclusive of cleaning fee + nightly room fee (which is fine). But  They are also taking the full cleaning fee as well separately …is this normal practice? I feel like now the effective rate is much higher than 18% (closer to 30% +)  we agreed on… since they are taking 18% of the net total AND the cleaning fee sum. Any guidance would be helpful thanks! 

Thanks all for the responses, i believe the misunderstanding is possibly on my end. I used to manage my own STR on Airbnb hence, I kept a majority of the payout. Now that I have a property manager, I heard the %18 and believed that to be the total expense without realizing the additional (cleaning fee, lawn care, state taxes, pool care), etc...so the effective rate is much larger and my net take home much less than I anticipated. It goes to show the value of effective underwriting upfront!

Thanks all,

JK

Quote from @Ahmed Omran:

Hi Joe,

This is normal, but we would only charge our owners 82% percent of the cleaning costs in your situation. We help manage Airbnbs for owners like you and found a way to avoid taking a percentage from the cleaning fee by adding our cleaners as Co-hosts with calendar access only. This way, the cleaning fee gets sent directly to the cleaners, and now we only get our percentage of the nightly rate instead of going back and forth with the owners collecting cleaning fees.

I own and manage a few short-term rentals in Indian Rocks Beach, Largo, and Seminole. If you need any advice or help with your rentals, just let me know: I would love to help

Thanks

 Thank you for the feedback Ahmed! I will be in touch once, would love to learn more about your current rentals within your portfolio.

Quote from @Tim Baldwin:

One thing I commonly see is that PMs charge the guest the cleaning fee. If they are charging you the cleaning fee, perhaps you should inquire why they are not charging the guest that fee. 

Thanks yea it appears the cleaning fee is being charged to the guest but being reported as part of my net take home. So he’s also charging the 18% on top of that while already taking the cleaning fee as well. Feels like a double dip scenario. 

Quote from @Tim Baldwin:

18-22% management fee is common in Florida for vacation rentals. What I question is the cleaning cost bringing your cost to 30% of the rental income...?

Hey @Tim Baldwin I guess I was under the impression 18% was the total covering the PM fees which included cleaning. Now that I’m paying 18% (which includes cleaning fee) then paying out the entirety of the cleaning fee as well feels like double dipping. The 18% in my opinion should be coming out of the net income - cleaning fee since that’s already going to the PM. Cleaning fee has been on average between $175-250 per booking.