Brunswick County Real Estate News

The popularity of self-managing vacation rentals has increased drastically over the last 5 years, with third-party listing sites like Vrbo and Airbnb providing homeowners with a system to manage their homes without involving a professional property or rental manager. Provided are basic management tools like a listing page, reservation system, basic pricing algorithm, etc., and they tend to make money. For some homeowners, self-management is ideal. For others, partnering with a professional like Margaret Rudd & Associates, Inc., REALTORS® means both making more money and enjoying more of their investment in not having to deal with the details!

Here, let’s discuss the 3 most common myths or misconceptions about self-managing vacation rentals so that you can make a more educated decision on whether to partner with a manager or handle it on your own.

Myth 1: I will make more money self-managing my rental.

A LOT of homeowners say they self-manage because they feel they will make more money. Whether it’s eliminating a costly management fee or feeling that a property manager will eat into their profit margins with service charges, owners worry that working with a professional means less profit.

In 2021, KeyData, a trusted global provider of short-term rental market data, found that the average annual revenue for a self-managing homeowner was around $44,000. In that same year, short-term rental homeowners who worked with a professional manager made just over $56,000.

Why the difference? There are a couple of reasons that professional managers see a higher profit for homeowners.

1. Marketing Power - inherent in your relationship with a professional manager is an effective marketing strategy that is more than a simple listing page on Airbnb and some social media. It involves email nurture campaigns, banner ads, paid search, SEO optimization, etc.

2. Pricing Strategy - while some listing sites offer a basic pricing software and/or algorithm, professional property managers use a robust pricing tool, run by revenue and pricing experts, to dynamically price properties. Property managers are getting the most money possible for their homeowners now, and not based on what happened last year. The dynamic pricing tool takes into account a variety of factors, historical and current to calculate charges that benefit owners both in revenue and occupancy rates.

Myth 2: It’s easier and faster if I just handle it myself.

Self-reliance is another argument given by self-managing owners. The belief is that it would take more time, energy, and money if they work with a professional manager.

Managing a vacation rental correctly takes time, whether an owner chooses to self-manage or hire a manager. Providing hospitality to and managing guests requires more than just replying to a few email messages or arranging housekeeping between a few reservations. A 2012 study conducted by Vrbo found that the average homeowner who chose to self-manage spent 8 to 10 hours per week managing their rental. This time only covered the most basic of management tasks (i.e., communicating with guests, turning the property over between stays, updating the booking calendar, and handling unexpected issues). Recent studies show that, as the market continues to grow and competition steadily increases, hosts and self-managing owners who wish to turn a profit will have to spend closer to 5 to 8 hours per day managing their rental.

Those timeframes don’t begin to cover or include the maintenance tasks required of a vacation rental with a high rate of traffic throughout a season or year. Nor does it include the time required to process all of the financial and accounting tasks to ensure fiscal responsibility and compliance.

What else could you spend that time doing?

Myth 3: I don’t trust anyone else to do it right.

Many homeowners who feel this way have a deep emotional connection with their property and struggle with relinquishing control without their oversight. They are often uninterested in revenue. Others are owners who have had prior negative experiences with a professional manager, or they have heard horror stories of other owners and they are suspicious.

We rely on professionals in most aspects of our lives. From mechanics to landscapers, from barbers and hairstylists to plumbers and electricians, we rely on trained professionals with industry experience to provide services. Rental and property management is just another form of service, provided by professionals who know how to optimize the experience.

Decisions, Decisions

Don’t let these common myths scare you away from the idea of self-management. Rather, consider them when deciding whether to self-manage or hire a professional. Consider whether self-managing your property is worth the energy. Would you rather spend that time enjoying it rather than worrying over it?

If you have questions about how the expertise of a property manager like Margaret Rudd & Associates, Inc., REALTORS® can benefit you as a homeowner, reach out to us at information@rudd.com or visit our Property Management website at https:www.rudd.com. We’ve been managing both long-term and short-term rentals for over 40 years, and would be happy to discuss the ways in which professional management can properly care for your rental and earn you more money in the process!