The short term rental industry has exploded in popularity over the past few years with ever-more sophisticated investors piling into the niche asset class. The increased competition in the market has spawned investors to think deeply about whether they want to undergo the laborious task of self-managing, or whether to hire a property management company (PMs).
Most decide their time is too valuable to stress over finding a plumber on a Saturday when their go-to plumber is on vacation (or any number of questions or issues that arise during a reservation). The next question thus becomes… who do you hire?
STR Property Management Companies are on a Spectrum
PMs are on a spectrum of small mom-and-pop operations managing just one or a few listings to massive companies managing thousands of properties such as Vacasa, a publicly traded company whose stock price has been nosediving since inception. Some think going with a larger company will result in more professional service as they have offices, large staff, and trucks with their name on them. Others believe hiring a good old fashioned local to keep an eye on their digs is the better option as they will provide more of a personal touch. After much research, my belief is that the middle ground is actually the most strategic decision which will benefit the investor the most by combining the operational scale of a large company with the personal touch of a mom-and-pop. These small but mighty companies often keep a low overhead but manage enough properties where they have the scale to attract great cleaners, handymen, and can hire a small staff to support 24/7 guest concierge.
Problem with Large Short-Term Rental (STR) Management Companies
After many interviews and a lot of research on these companies, I noticed that most management companies (both small and large) do not have good systems around the small details of STR management resulting in poor guest experience, low review scores, low bookings, neglected properties, and unhappy guests and owners. I also noticed the larger companies manage way too many properties, and thus cannot provide the proper care for specific problems because each property becomes just another disposable number. They would overpromise to land the client, under deliver, and then overpromise again when a client would complain. They would improve for a short period of time, but their lack of care and disorganized operation would inevitably lead to the same result-- a poorly managed cabin with bad occupancy and low AirBNB ratings.
The Rise of the Small Mom-and-Pop PMs and Where They Fall Short
In 2022-24, I noticed growth in the "Mom-and-Pop" management companies-- a local person or couple who knew how to set up an AirBNB listing and was able to add a personal touch to managing the client's home. I noticed these Mom-and-Pops were a slight improvement over the large, impersonal, careless STR management giants (Vacasa, Evolve, large local companies), but did not have the sophistication to integrate a full Ai-enabled tech stack, lacked dedicated revenue and pricing analysts, and were generally unsophisticated in terms of how to maximize the value of the property. I realized that Artificial Intelligence was the future and those clients who partner up with management companies that are at the cutting edge of Ai would be well set to perform well as the dynamic STR industry becomes more competitive.
In both Large Management Companies and Mom-And-Pops, I noticed countless inefficiencies, such as unnecessary Maintenance Tickets (and costs to the owner!) that could have been troubleshooted, properties that are not well taken care of (lack of proactive inspections, follow ups, and documentation), slow communication, underpaid cleaners, and a plethora of other items that lead to a clunky and sloppy experience for both Guests and Owners, costing them money and peace of mind. I spoke with countless employees of these companies who complained incessantly about how the companies would overcharge their owners for small fixes ($40 to change one light bulb?) and would mistreat and underpay employees. I thought deeply about what I would want from the perspective of all stakeholders-- Owners, Guests, and Employees-- and how to make the difficult task of managing STRs a win-win-win for everyone.
The Peak Method
After years of perfecting my processes and systems, I rolled out The Peak Method in 2024. The Peak Method is a Kaizen-inspired living document that is updated with every new scenario that happens during the life cycle of a STR from Inquiry stage to when the guest leaves the home, leaves a great review, and returns for their next stay. The Peak Method is detailed in a 1000-page operating manual which captures the tiniest details of everything from how to handle a challenging guest to how to troubleshoot a bad wifi connection (and thus reduce maintenance costs of sending a handyman).
The goal is to Save Owners Money, Improve Guest Experience, Maximize Investment Potential (Reach Your Peak), and Streamline STR Operations.
