1. Managing STRs is similar to LTRs. False!
STRs are many magnitudes higher in terms of level of involvement over LTRs. From small questions like "Can we bring a pet?" to handling the damage claim process (which can require extensive documentation and multiple long phone calls with AirBNB service reps), managing the process of fulfilling the expectations of a stranger in your home can be very involved. Immediate action on events that can jeopardize a large payout for a booking (like an HVAC or water problem) raises the stakes to a level way above that of a LTR in a long-term lease with minimal recourse in the event of an inconvenience.
2. All managers are the same, so choose the cheapest.
Your most important choice after choosing which property to buy, is WHO will you choose to manage it. Arguably, the management company you choose is even more important than the property you buy depending on your market! A Good manager can drive upwards of 30% MORE revenue, while a poor manager can leave your calendar empty, and allow your home to be left in disrepair, potentially costing you tens of thousands of dollars.
3. The older, larger, "more established" management companies will do a better job because they have an office, more staff, and a sales team.
Large management companies often have large overhead costs and thus must either 1) manage a ton of properties, 2) charge higher rates, or 3) nickel-and-dime you to death to cover these high costs lest they go out of business. These overhead costs serve to give the appearance of legitimacy, but they actually often are simply unnecessary costs that the company could save and thus pass those savings onto the clients or invest in other technologies or staff to increase the guest experience. These companies often have unmotivated employees, burned out cleaners, and weak attention to detail. Given their lack of employee engagement, they have high turnover, low quality, and do not provide the level of detailed care needed for each property to thrive. Smaller, nimbler companies can operate profitably with fewer properties, maintain a tighter, more loyal staff, and pay more attention to details thereby keeping your reviews high, and bookings flowing.
4. The best bookings are direct bookings - Bookings from AirBNB come with massive benefits over direct bookings.
AirBNB has a sophisticated system for vetting and weeding out bad guests, and each booking comes with $1 million of built-in liability and property damage insurance. Furthermore, guest reviews allow the manager to only allow guests who have good prior reviews from other hosts. Direct bookings are often a black box, and you have little recourse to destructive guests. Further, even direct bookings by your management company will come at a cost, as they will often charge you a booking fee similar to the commission charged by AirBNB or VRBO.
5. Once I'm up and running, I never need to visit my STR.
Although the best management companies can make the investment almost entirely passive, the best clients are those that visit their STR once a quarter or so.
The reason is that clients may want to make upgrades, add design touches, or may see something that only an owner's eye can detect about their property. It also helps the Owner and the Management company be on the same page with the property condition and agree on any updates/improvements that should be made. Owners also come to oversee any larger renovation or maintenance projects, as the typical property manager is not in charge of larger jobs unless they are paid an additional commission similar to that of a project manager or general contractor. Finally, an active Owner that is invested and involved in his or her property builds trust with the Management company, and allows them to get face-to-face and further build trust in the relationship.
