All Forum Posts by: Patrick F.

Hi all, I'm coming close to buying my first rental as an out of state STR. I have been in contact with a local property manager who charges 18% to manage the listings on their accounts (Airbnb, Vrbo, etc), take care of cleanings, help with stockings, set the prices, and really just let me collect a paycheck every month. Given that this is my first rental (and the nerves are there), this seems like a nice convenience for peace of mind.

However I was crunching some numbers and it looks like self managing could almost double my cash flow. I’m a little worried about finding cleaners and handling stocking of household items. I also worry that having a new Airbnb/Vrbo account could lead to review-volatility as opposed to using a PM’s established account.

Anyone have advice on the above? Any tips on finding out of state cleaners & stockers? (especially in South Bend!) Any suggestions for PM softwares like Guesty, etc? Thank you!

Super confused. How does removing a service at 18% charge of rents, equal 100% additional profit?

Are you saying your STR is operating with a gross-net margin of less than 40%? Because that should be your #1 issue if that's the case.

I probably could’ve explained this better (my bad!), but my net profit, not gross, would double. I’d go from $500ish to $1000ish in my pocket every month after taxes, expenses, etc.

1 Vote

South Bend, Indiana

Quote from @Michael Baum:

Hey @Patrick F., is the listing under their name? If so that is a bummer as they own it so all the reviews are theirs and if you decide to change systems, you will have to start over.

@Michael Baum It would be. Think it is worth it to see if we can put it under my name? I would be starting fresh with a new host account so not sure how that would affect bookings, etc.

0 Votes

South Bend, Indiana

Quote from @Narmina Amirbekova:

Quote from @Eliott Elias:

This sounds like a co-host service, not property management. Co-hosting in my opinion does not justify 18%.

That is what I am thinking too. What does 18% include? for example I have property manager that is only engaged in talking to guests and cleaning crew and he is out of state. I live 10 min away from the property and still have to go there each time something breaks or needs attention i wish i could pass it to property manager as well. Or do i need to hire handyman?

The 18% here includes listing (on their respective accounts), pricing, cleaning, communicating with guests, receiving packages & stocking, and marketing. I’m just reading up on cohosting now but it seems like co-hosting is less involved than PM’ing?

0 Votes

South Bend, Indiana

Quote from @Matt Barth:

Finding a good PM can be a hassle, but not as much as doing everything yourself. I would say if you want a job and you need the cash flow for this to make sense and you don’t mind how much time you are going to pour into making x amount of dollars then self manage. If you don’t want a part time job or your time is more valuable definitely hire a PM.

I really like this framing. The goal is to get passive income after all!

0 Votes

South Bend, Indiana

Quote from @Nathan Gesner:

Quote from @Patrick F.:

Self management doubles your cashflow? What are the hard numbers?

Let's say your cashflow goes from $10,000 a year to $20,000. That's $10,000 more in your pocket . . . but it comes at the price of you being the one to answer all the calls and emails, emergency calls from guests that can't find the breaker panel or figure out how to operate the A/C, guest complaints, coordinating cleaners, refunds, or whatever.

If you have 150 bookings a year and spend an average of one hour per guest, that's 150 hours of your time. If your time is worth $40 an hour, that's $6,000. So you've only gained $4,000 in cash flow.

There are many guests that won't take 5 minutes of your time. There are others that will suck up hours. Talk to others that self manage to get a realistic idea of what it takes to manage in the Smokies, do the math, and decide if it's worth the effort or if you just want to hand it over.

18% management fee? That sounds awfully cheap and I would have to question how professional they are. But maybe that's normal in the Smokies?

That’s a good way to look at it. The hard numbers aren’t necessarily worth all the extra time put into it especially if I want to scale up. And this is in South Bend, not the Smokies - different ‘S’ town!

0 Votes

South Bend, Indiana

Anyone have advice on the above? Any tips on finding out of state cleaners & stockers? (especially in South Bend!) Any suggestions for PM softwares like Guesty, etc? Thank you!

0 Votes

South Bend, Indiana

Hi All,

I am looking to buy my first property as a short term rental townhome in South Bend. I am an out of state investor from Northern VA so I plan on using a property management company that pays me monthly after deducting expenses.

My main question is with regards to managing money for your first rental. Is it recommended to open a new bank account & obtain a business credit card/separate credit card for your rental business? Do I need to setup an LLC to obtain these? Since I will be using a property manager for this first rental, I imagine most of my expenses will be utilities & occasional supplies. I'm leaning against setting up an LLC at this moment as this is only my first rental (that's a topic I'll explore later!).

Additionally, after this investment I would like to expand and possibly get into the long term investment market as well. My assumption is that having the separate banking infrastructure could be good as I expand my portfolio.

1 Vote

South Bend, Indiana

All Forum Posts by: Patrick F.

Patrick F. has started 2 posts and replied 7 times.

Post: Are out of state property managers worth it?

Post: Are out of state property managers worth it?

Post: Are out of state property managers worth it?

Post: Are out of state property managers worth it?

Post: Are out of state property managers worth it?

Post: Are out of state property managers worth it?

Post: Type of banking accounts & credit cards for managing first property and beyond