short term rental management tailored for success
what IS SHORT TERM rental management?
With the recent boom in short term rental platforms such as Airbnb, most people who own investment properties have no doubt at least heard about the possibility of increasing their income with short term rental versus traditional long term. Before delving much further into the issue, however, many people dismiss this as a viable option by the sheer overwhelm from what may be entailed in short term rental management. If you are even remotely considering the possibility of increasing your passive income by converting your investment property into a short term rental, we encourage you to continue reading to find out just how easy it can be.
why hire a short term rental property management company
Management of a short term rental property does require many moving parts. From assessment of the market to interior design and landscaping, setting up the property to photography, listing on online platforms with clear marketing strategies, not to mention day-to-day management activities such as listings management, bookings and payments, guest check-in and check-out, guest concierge, restocking, cleaning and maintenance, it is no easy feat, even if you don’t have another full time job!
This is where a full-service short term rental property management company like Speed Keyz can help. We begin each new account with a feasibility report that projects your likely revenue from the rental activity utilizing the latest accurate market data so you can make an informed decision about whether to move forward. Should the numbers work for you, and you do decide to move forward, the design and set-up process can begin. You may choose to do this on your own, use us as a consultant, or simply provide us with a budget and let us do the entire set-up if you would rather not deal with it.
We also provide optional professional photography services for your listing, set up your strategic listings with our marketing expertise on multiple online platforms, and deal with ongoing listings management, coordinate bookings and payments over multiple platforms, and continue monitoring the market to ensure optimum pricing and maximum revenue.
We take care of all maintenance and cleaning tasks, make sure your guests are always supplied with clean linens, restock all refillable amenities, coordinate check-in and check-out processes, and provide 24/7 guest concierge services. We even employ guest screening services and noise monitoring procedures in order to ensure quality guests and to prevent any undesirable issues before they arise.
Advantages of short term rental compared to long term rental
With such an overwhelming list of tasks required in short term rental management, one may ask why they would even consider it. Why not just stick with the traditional long term rental model and enjoy the steady income?
The biggest attraction for many short term rental owners is the increase in income. Even with the additional cost of third party management fees, revenue for short term rentals in the large majority of markets is considerably higher. For example, a typical 1-bedroom home in Los Angeles or Orange County may rent for around $1,500 monthly, resulting in annual revenue of around $18,000. That same home as a short term rental in the Southern California region would rent for approximately $140 nightly. Even if this home is only rented 80% of the time, the resulting annual revenue would be around $40,320 which is around 2.25 times higher.
For some, the incentive is not the additional revenue but the flexibility. Perhaps your second home is in a vacation area that you would like to use from time to time, or maybe it is in your own neighborhood and you often have guests coming into town to whom you would like to offer the space. Whatever your scenario, the short term rental model provides you with the flexibility to block off certain dates for your own use while still generating income on the property. Based on the sample Southern California home mentioned above, your property would only need to be rented for 11 nights per month in order to generate the same revenue as for long term rental.
These advantages, coupled with the elimination of much work and headache when hiring a short term rental property management company, really makes the decision a no-brainer for many property owners!
In the real world, profit is what matters above revenue, and we understand this fully at Speed Keyz. There are obviously costs to be considered when hiring a short term rental management company, and this is what will ultimately make or break the deal.
According to Lodgify, the industry average for short term rental management fees is anywhere from 25-30% of the rental cost. At Speed Keyz, our service fees are highly competitive, ranging from 15-20% depending on the size and type of your property.
Utilizing the sample of the 1-bedroom home above, your annual revenue less the short term rental management fees would come to around $34,272 at our lowest rate of 15% (the likely scenario for a 1-bedroom), or $32,256 at our highest rate of 20%. These revenues are still 1.9 times and 1.8 times higher than for long term rentals respectively.
There are also some upfront costs to consider. Both short term and long term rentals will require some amount of set-up (or staging), as well as photography and listing costs. While the set-up cost of a short term rental will likely be higher due to needing to fully furnish the home, there will be no additional listing fees as this is included in our short term rental property management package.
Finally, maintenance and repair costs may also be considered. Many people worry that having multiple groups of people come through their home will increase maintenance and repair needs. However, many homeowners report that this is not necessarily the case.
For short term rentals, you can rest assured that your home is being cleaned and maintained regularly at each guest check-out. At this time, we also monitor for any issues or damages so they are caught early before it becomes a bigger issue, and we follow up with guests so that any damages they have caused are paid for. Many long term rental owners report excessive damages and wear and tear when residents move out after several years without proper cleaning and maintenance, often resulting in extensive work.
So, while short term rental management fees are clearly higher than the costs associated with renting a home the traditional way, the large difference in revenue more than covers this difference to make the short term rental route highly worth considering.
Serving You, Your Property, and Your Guests with Excellence
- Our market research team always has the latest and most accurate data to ensure you receive the highest return possible within the current market
- We list your property on multiple platforms to maximize occupancy
- We carry insurance of up to $1 million for each property
- We monitor your property at all times to ensure it remains in great condition, and that your guests are satisfied