Should YOU self-manage your vacation rental?
So you own a short-term vacation rental and you’re thinking about (or already are) doing the property management yourself. If you’re retired with ample spare time and desire, manage multiple rental properties as your primary source of income (have a vacation rental business), or have no outside distractions and can solely focus on your properties for part-time rental income, self-management may be for you.
If you have a short-term vacation rental AND a full-time job, school-aged children, family members to take care of, or other primary responsibilities, read on. While it may be tempting to handle it all in order to bring in greater profits, consider one thing homeowners often overlook: TIME.
What is your time worth? What could you do with 240 extra hours each year?
To help you decide if vacation rental property management is the way to go as a property owner, let’s look at a few examples.
Assume you own a 2-bedroom short-term vacation home – whether it’s a cabin, condo, luxury home, or chalet – and it brings in $48,000 in gross annual income. Unfortunately, you don’t just get to pocket that amount. Now you’ll have to consider linen costs, including laundry and replacement, garbage collection, and general maintenance expenses like lightbulbs, batteries, HVAC filters, kitchen supplies, bath items, and more. As a generous figure, you’ll make about $46,000 after all of those expenses. That doesn’t cover major issues that may come up or marketing in the vacation rental industry, and it certainly doesn’t account for one major factor: your time.
When you self-manage your short-term rental, you are self-employed in the vacation rental market. You have to consider the amount of time you spend when thinking about what you’re actually making in profit. When you break down your daily, monthly, and annual activities, you’ll be:
- Creating and updating web pages and social media sites and posts, including search engine optimization
- Interacting with potential guests, current guests, and past guests – and answering all their questions
- Generating, processing, and sending rental agreements once guests have booked
- Issuing refunds and dealing with cancellations
- Taking care of financial accounting
- Making decisions on dynamic pricing for property listings
- Responding to guest reviews
- Handling tax reporting
- Dealing with check-ins and checkouts
- Managing guest occupancy throughout the year on multiple booking sites
- Managing cleaners, maintenance workers, and their schedules
- Answering late-night calls
- Giving directions
- Figuring out any necessary management software and vacation rental software
- Helping with lockouts
- Handling all guest communication
- Ensuring you have all required IRS forms and information for money paid to maintenance workers, cleaners, and technicians
- Ensuring a great guest experience for every single guest
When you add up all that time, you’ll probably be averaging about 3 hours per stay (conservatively). Multiplied by an average of 80 bookings per year (average for a 2-bedroom cabin), that adds up to about 240 hours per year – or 6 weeks out of your life!
But what about with Georgia Cabins for YOU?
Now consider that you own the same property, generate the same amount, and have all the same needs for your short-term vacation rental – but now you have Georgia Cabins for YOU managing your property. At a 20% commission, you’ll take $9,600 out of your $48,000, plus $936 for the CFY Advantage Plan. Now you’ve made $37,464 ($8,536 less than if you managed yourself), but without the 240+ hours of work you would have put in. If you were paying yourself hourly, you would only be making $35.56 per hour – and is all that work really only worth that?
Consider what you’ll miss during all those hours of management…
- Family dinners
- Sporting events and kids’ recitals
- Vacations and weekends away
- Other business opportunities
- Quality sleep
If you own a 1-bedroom cabin or studio, the numbers are even more disappointing. Remember that self-management doesn’t always mean more money for YOU, but it does mean more time, effort, work, and stress on your part. Time is one thing you can never buy more of. Is a successful vacation rental – and a successful personal life – your ultimate goal?
Remember what your time is worth and let us handle everything for YOU with our full-service management options! We are a passionate, family-owned, and experienced vacation rental property management company that can let YOU enjoy success while we handle the work.