Once you buy a rental property to start an Airbnb business, you must decide on the optimal short term rental management solution. How you manage your property determines your ability to attract bookings and generate income, the costs you incur, and your return on investment. Ultimately, management is one of the most important factors in building a profitable short term rental business.
You can manage your property on your own, find a co-host, use vacation rental management software, or hire a half-service or full-service short term rental manager. Each method comes with its pros and cons, and the decision depends on your skills and experiences, availability, the short term rental and its needs, the market, and your preferences.
This article outlines the 5 most popular short term rental management solutions, starting with the most time-intensive yet least expensive for owners and ending with the most hands-off approach.
Manage Your Short Term Rental Yourself
One way to run a vacation rental business is managing your property on your own. While you protect the best interest of your short term rental and keep all revenue for yourself, this solution might be more complicated and less efficient than it sounds.
Overview and Who This Solution Is Right For
When you manage your own short term rental, you are responsible for all the day-to-day tasks and activities required to host high-turnover guests and to maintain a property experiencing above-average wear and tear.
Managing your own vacation rental usually works best for investors who have some experience in real estate or hospitality as well as strong organizational, managerial, analytical, and interpersonal skills. One also needs to invest close to home and be available for at least a few hours a day, so this is usually not a good option for those with a full time job. After all, you must be available to clean, restock supplies, and respond to guest questions at all times of the day and night.
There are ways for short term rental owners to alleviate this burden without compromising the quality of services that they provide to guests, such as using software to streamline and automate some processes or hiring a local team of cleaners, suppliers, and handymen.
What the Process Looks Like
With this short term rental management solution, the host is the sole provider of all services that the property and the guests need, which include:
- Preparing the property for listing, including designing and furnishing the rental, installing smart locks, safety devices, and attractive amenities, obtaining short term rental licenses and permits, setting up taxes, and purchasing Airbnb insurance
- Listing the property on Airbnb and other top booking channels, including providing engaging content using the right keywords, uploading high-quality photos, listing amenities, setting up policies, and writing a guest guidebook. In addition, you must ensure that all information in your listing remains accurate and make necessary edits if anything changes
- Collecting data on the local short term rental market to set up dynamic pricing in line with seasonal changes in supply and demand to strike the optimal balance between nightly rates and occupancy rates
- Managing a unified booking calendar across different distribution channels
- Communicating with guests before, during, and after their stays
- Reviewing reservations, screening guests, and approving bookings
- Professionally cleaning, doing laundry, and restocking between guests such that you never run out of guest supplies
- Maintaining amenities such as hot tubs, swimming pools, mini golf courses, etc.
- Following up with guests after their stays to ask for reviews to enhance the performance of your Airbnb listing
- Performing preventive maintenance to make sure that your property is always in top shape
- Identifying and addressing emergency repairs and fixes, which usually means coordinating the work of local contractors. It’s best to build a team of vetted, trusted professionals as soon as you buy your short term rental
- Conducting monthly short term rental property analysis and identifying ways to improve performance
As you can see, this is quite a long list of responsibilities that requires a lot of free time and real devotion to your investment property.
Cost and Time Needed
One of the main reasons hosts choose to manage their short term rental property on their own is to avoid fees that Airbnb property managers charge, which can sometimes exceed 40%. Property management fees are zero in this case.
However, there are certain costs that owners need to take into account, including:
- Access to short term rental data and analytics to set up dynamic pricing to boost income
- Marketing and advertising
- Cleaning supplies or fees, depending on whether they decide to do housekeeping on their own or hire a local vendor
- Guest supplies
- Preventive maintenance including hot tubs, pools, HVAC, etc.
- Hiring contractors for repairs unless owners have construction skills
Airbnb hosts report that it takes about 5 hours per booking to complete all necessary tasks. Depending on the Airbnb occupancy rate and the average stay length, this translates to 2-3 hours of active work per day. This may not sound like a lot, but the real downside is that you must be available 24/7 to review and approve reservations, address guest inquiries onsite and offsite, fix issues during visits, and coordinate your short term rental management team if you have one.
Pros and Cons
Self-managing a short term rental comes with important advantages and disadvantages that hosts should take into consideration before making a decision.
The main benefits of being a DIY Airbnb host are:
- Keeping all revenue (minus operating expenses)
- Taking the best possible care of your property: After all, no one cares about your investment property and your rental business as much as you do
- Making all decisions regarding your business
- Being constantly aware of the state of your property and your business
Meanwhile, the key drawbacks include:
- Hours of hard work each and every week
- Potentially not optimizing the performance of your short term rental: Succeeding in the hospitality industry requires certain experience and skills as well as access to reliable data and top service providers
- Around-the-clock involvement: Hosts often find it impossible to take a break and go on vacation when managing their properties themselves
- Competing with Airbnb Superhosts with thousands of positive reviews
Some of the risks of self-management can be avoided by using vacation rental management tools.
Enlist the Help of a Co-host
Managing an Airbnb property with a co-host or co-hosts is similar to managing on your own, but splits the work between two or more people. There is no fixed way of organizing this arrangement, so co-hosts can divide the tasks and responsibilities in the way that best suits their skills, preferences, and availability.
Overview and Who This Solution Is Right For
Enlisting a co-host for the management of a short term rental means finding someone who can help you with different aspects of the business. Revenue is often shared according to the level of effort exerted by each co-host and their ownership in the property (a co-host may or may not own part of the rental).
To choose the right co-host, it’s important to deploy a diligent process. Co-hosts must be responsible and trustworthy, have some understanding of real estate or hospitality, be as driven and motivated as you, and be available to manage the property most of the time. You can look for a co-host among family, friends, colleagues, acquaintances, business partners, or local circles of vacation rental investors. If you’re new to Airbnb hosting, it’s smart to look for someone with more experience so you can benefit from their skills and give your business the initial push it needs while you learn all the tricks of the job.
Once you find the right co-host, it’s crucial to negotiate and sign a written agreement that details the specific responsibilities of each partner and the revenue sharing ratio.
The co-hosting short term rental management model works best for owners who would like to be personally involved in their Airbnb business but don’t have all the necessary skills or time. It’s usually a good fit for those who are strong team players, like taking others’ opinions into consideration, and don’t shy away from sharing their opinion when needed.
What the Process Looks Like
The first step in setting up a co-hosting partnership is to identify both why you need a partner and what you would need from this partner: Do you lack experience and skills? Are you too busy at the moment? Do you not feel like dealing with guests directly? Are you bad at data analysis and calculations? Would you like to take time off from your business? Knowing the answers to these questions will help you build the optimal co-host persona.
Next, consider which of your friends or acquaintances might make a good co-host and check if they are interested. You can also visit online real estate investing forums or attend local meet-ups to get to know potential co-hosts.
When you identify a co-host and reach an agreement, make sure to put everything in writing. Then you are all set to start managing the property according to your agreement. What the process looks like for co-hosts can vary widely, depending on their stipulated responsibilities.
It’s important to communicate consistently with your partner and fix all issues as soon as they arise so that your partnership does not fall apart and risk your entire vacation rental endeavor.
Cost and Time Needed
Similar to Airbnb self-management, co-hosting requires zero management fees. The associated costs are the same and depend on whether you and your partner do all the work yourselves or hire a small team. It’s important to note that doing everything on your own is more feasible with a co-host as you might have complementary skills and share responsibilities.
Enlisting a co-host is expected to halve the time that you need to manage a short term rental, on average. Of course, the time-savings will vary depending on how you divide the work.
Pros and Cons
The most important advantages of having a co-host include:
- No short term rental property management fees
- More experience and expertise
- Focus on the things that you are really good at
- Sharing responsibility
- Potential performance improvement
- Time off can be arranged between co-hosts
The main disadvantages of managing an Airbnb rental with a partner are:
- Getting only a share of revenue
- Partnership risks
The impact of risks such as the co-host not fulfilling their obligations or asking for more money down the road can be minimized by preparing a detailed written agreement that is legally enforceable.
Use Short Term Rental Management Software
DIY hosts can also utilize various Airbnb management software platforms and tools to retain control over their business while automating the most time-consuming and nerve-racking tasks.
Overview and Who This Solution Is Right For
The boom in the vacation rental industry has caused the proliferation of short term rental management software solutions, from dynamic pricing tools like Wheelhouse to vacation rental cleaning management platforms like Turno (formerly TurnoverBNB).
Using vacation rental management tools is ideal for hosts who want to be involved in their business while boosting its performance, saving time, and gaining efficiency. Generally, this solution is a good option for owners who live close to their property as they still need to handle things like maintenance, inspections, and repairs.
What the Process Looks Like
Subscribing to short term rental management tools does not change the core of managing a property on your own as you remain responsible for all tasks. However, technology can help streamline and automate some processes, such as pricing. Indeed, Airbnb dynamic pricing tools are some of the most popular software solutions as they provide access to thousands of short term rental data points that are usually not freely available, complicated calculations, multiple iterations, and continuous updates.
All in all, the right software helps improve speed and efficiency as it can provide accuracy driven by big data.
Cost and Time Needed
The main cost associated with software is the subscription cost of the select tool(s), which can vary from a few dollars to a few hundred dollars per month. For example, Wheelhouse monthly subscription is available for either 1% of revenue or $19.99 per listing, allowing hosts to automate dynamic pricing, manage revenue, increase income by 20%, and grow their portfolios.
Automating parts of the management process can help Airbnb owners save a few hours per week.
Pros and Cons
The most considerable benefits of introducing software tools to the management of your short term rentals include:
- Short term rental management automation
- Time savings
- Performance improvement through reliable data
- Keeping most revenue to yourself
At the same time, some drawbacks to keep in mind are:
- Potential Airbnb data accuracy issues
- Tech issues such as glitches
- Relying too heavily on technology and ignoring the needs of your property and guests
- Monthly cost
The best way to avoid the cons of using vacation rental management software is to conduct thorough research, check out customer reviews, and talk to fellow hosts in order to find reliable tools with accurate data to truly enhance performance.
Hire Half-Service Vacation Rental Management
Short term rental owners who don’t have the time or skills to manage their property but don’t want to entirely give up control over business decisions frequently work with half-service Airbnb property management companies. This is a hybrid between using software and hiring full-service management. Half-service companies offer access to multiple tools to streamline and automate management while leaving certain aspects to the hosts themselves.
Overview and Who This Solution Is Right For
Using a half-service Airbnb property manager refers to accessing a platform that brings different software tools that help automate various tasks. Usually these are the most tedious activities, like listing distribution and optimization, dynamic rental pricing, guest communication, check-in and check-out coordination, and review management. Owners remain responsible for everything else.
Half-service short term rental management is the right solution for Airbnb hosts who want to be in charge of their property but have limited time availability and potentially skills.
What the Process Looks Like
Hosts who would like to work with a half-service manager need to review a few available options, like Evolve and RedAwning, for instance. It’s a good idea to get feedback from fellow hosts who have worked with these companies and also check out online reviews on third-party websites in order to find a trustworthy property manager that provides the exact services that you need.
While there are variations in service coverage, most half-service vacation rental managers provide:
- Listing creation and optimization
- Marketing and advertising
- Dynamic pricing
- 24/7 guest support and communication
- Booking calendar management
- Check-in and check-out management via smart locks
- Guest review management
- Tax collection and remittance
Additional services offered by some companies include:
- Short term rental insurance
- Cleaner recommendations and/or coordination
The remaining services, such as setting up the property, (sometimes) cleaning and restocking, maintenance, repairs, and team management, remain the responsibility of the Airbnb host.
Cost and Time Needed
Most half-service short term rental property management companies charge 10% of monthly revenue. Fluctuations in the rate are possible, but anything below 6-7% is suspicious, and anything above 15% is excessive considering the scope of services.
The best half-service vacation rental management companies can cut host involvement by half or more.
Pros and Cons
Similar to all other approaches, hiring a half-service property manager has its pros and cons.
Major benefits include:
- Significantly less time required from hosts
- Access to industry-leading technology and best practices
- Streamlined access to multiple listing platforms
- Optimized daily rates
- Expected boost in performance
Some downsides to consider comprise:
- Giving up part of revenue
- Significant work left for the host
- Performance might not be optimized if the property manager is not good
Owners can maximize the benefits of hiring a half-service short term rental manager by conducting diligent research to choose the best option available in their market. Moreover, they should opt for a company that has flexible terms so that they can easily cancel if they are not satisfied with the service scope and quality.
Opt for Full-Service Vacation Rental Management
Finally, short term rental investors who are looking for passive income from their real estate investments choose to hire a full-service vacation rental management company. Such companies cover the vast majority of tasks related to owning and operating an Airbnb business while enhancing performance as a result of their expertise.
Overview and Who This Solution Is Right For
Hosts must choose the best Airbnb management company in their location. Most markets offer dozens of property managers, but the quantity and quality of services and cost varies widely. Moreover, there are small-scale, local property managers and large-scale, national companies to select from. Owners should study available options carefully and choose wisely to strike the right balance between services and fees.
Hiring a full-service short term rental management company is the right fit for investors who own a property out of state, have a full-time job, don’t have hospitality experience, and/or expect passive income.
What the Process Looks Like
Once a short term rental property owner has selected the top company in their market, this company should take over the majority of responsibilities associated with managing a vacation rental. This includes everything from listing and marketing, through housekeeping and revenue management, to preventive maintenance and emergency repairs. The best Airbnb management companies even provide interior design and furnishing services and help owners obtain and renew required licenses and permits. However, the scope of services varies from one company to another, so owners should find the one that is capable of meeting their needs and the needs of their property.
Summer, the top-ranked short term rental management company in the US, provides around-the-clock, all-in-one services that are fine tuned to the needs of each rental and each host. The company takes over all necessary tasks so that owners can enjoy passive income and strategize investment portfolio expansion. Summer offers vacation rental design and furnishing services, including flexible options for hosts with different preferences and budgets.
As a result of its top-quality services, Summer-managed properties outperform 95% or more of comps in each market. The company has nationwide coverage, working in locations where it can guarantee excellent services that consistently exceed guest and host expectations.
With Summer, hosts’ work is virtually brought to zero.
Cost and Time Needed
Full-service short term rental property management fees range between 25% and 40% of monthly revenue inclusive of cleaning fees. In some cases, costs can even exceed 40%. For instance, Vacasa fees are notoriously reported to frequently go above 40% of monthly income.
In addition, some companies charge additional fees for necessary tasks like professional photography, linen provision and laundry, hot tub and swimming pool maintenance, and landscaping, further inflating the cost of hiring a property manager.
Companies offering interior design and furnishing services, like Summer and Air Concierge, charge for this service separately because of the high cost associated with furnishing a short term rental.
Meanwhile, Air Concierge even has an onboarding fee and an early-termination fee reaching $7,500, which is not the standard in the Airbnb management industry.
Summer, on the other hand, charges an industry-low fee, starting at 20% of booking revenue exclusive of cleaning fees. This is a single monthly fee, with no additional charges and no hidden costs. Interior design and furnishing services start at $10,000.
When hosts hire a full-service property manager that provides truly comprehensive services, they don’t need to do anything. All they have to do is to sit back, relax, and enjoy their short term rental income.
Pros and Cons
The benefits of full-service management include:
- Passive real estate investment income
- Optimized management
- Access to an Airbnb Superhost account
- Revenue maximization
The main drawbacks of working with an Airbnb manager include:
- (Potentially hefty) vacation rental management fees including hidden fees
- Loss of control over your Airbnb business
- Potentially subpar services
While choosing the right co-host, software, and half-service property manager is important, selecting the best full-service short term rental management company with a proven track record of outperforming the market average is absolutely necessary. Once someone else is fully in charge of the management of your investment, you need to know that they are doing everything possible to provide exceptional services to your rental and to your guests. Alternatively, your income might plummet and your property might get destroyed by reckless guests and delayed maintenance.
Bottom Line
Short term rental investors can choose from 5 main options to deal with the management of their property. The decision should be based on their location, property needs, skills, availability, goals, and personal preferences.
Hosts who would like to take care of their business and interact with guests should consider managing their rental on their own, with a co-host, or with the help of software solutions. Those who would like to give up some responsibilities can look for the best half-service managers, while investors searching for passive income need to hire a full-service short term rental management firm.
