While the early days of managing your STR listings might be truly fun and exciting, at some point many consider using a property manager for their vacation rentals. This can be a great option for some, overkill for others. Let’s consider the benefits.
Let’s start with who needs property management. Not someone with one listing who has all the profit already allocated. There’s simply no margin to pay a property manager and no economies of scale to make it worthwhile to both parties even if there were.
If you are running at least five vacation rental properties and you have some margin that you can spend on a property manager, you should consider it. If you haven’t met these two conditions, you shouldn’t.
There are really wonderful benefits to having a property manager in place:
- Delegation: free yourself up to do more strategic work or less work overall, whichever is more suited to your general trajectory for these listings.
- Remote option: if you no longer have to be on site, you don’t even have to be in the same city. You can explore remote options for life and work.
- Reduce risk: many property management companies have risk mitigation built into their contracts so you can have an additional layer of protection beyond insurance.
- Better results: professionals often have access to better software tools and marketing methods, to say nothing of years of experience across various property types to help you get higher occupancy, better reviews, and more revenue overall, even including property management costs.
As in almost any industry, software continues to make a real push to solve many business problems. While we love property management software, especially the kind that can automate cleaning schedules, software can’t replace a property manager…yet. Who knows what AI has in store for us, but for now, PMS is not a like-for-like alternative to property management.
Hiring a Property Manager
As always, you’ll want to hire in alignment with your goals. Are you looking to build a small lifestyle business, with perhaps a dozen listings or fewer? Perhaps a local manager makes sense, especially if that person has roots in the community or has long-term plans to stay. If you’re looking to scale outside of one geographic area or beyond a dozen listings, it might be better to look at a national company who can grow with you and may even assist you in finding future listings as you grow.
There are really no downsides to a property manager. It’s just a question of the right time and the right person for your listings, your goals, and your cash flow.
This content originally appeared in our twice-monthly Guest Book Newsletter.