Should I Use a Rental Company for Short-Term Rental?
By: Jillian A. Mills, REALTOR®
So, you have a house you’d like to rent out for extra income, but you don’t know if you should leave it to a professional or DIY it. This is not one of those things where there is a right or wrong. It really depends on a lot of things. Online platforms that assist in booking have exploded in popularity. And, many homeowners have decided to use their assistance or try their hand at renting on their own. Some are wildly successful while others end up with absolutely cringeworthy stories. With that said, let’s look at what rental companies can offer:
So, what is the drawback? Some homeowners balk at the cost. According to IGMS, rental property management can run 10% - 50% of income, depending on the property and location, with the average being 20% - 40%. “Why would anyone be willing to take those kinds of splits?” you ask. Because it’s turnkey. They don’t want to have to think about it. The income may take a hit, but it requires nothing of them but cashing the admittedly skinnier checks that roll in every month.
If you don’t like the idea of sharing your profits, you can give renting your house yourself a go. Just be aware of all it entails. It is much harder to manage a property that’s some distance from you. Having to drive or fly in when there are concerns or issues can be tedious, time-consuming and costly as can long-distance management of your contractors. Much of it will center around time. Do you have time to build a website, screen and hire housekeepers and maintenance workers, all while fielding calls, managing reservations, etcetera? Then, there are the unexpected things that fall outside the parameters of maintenance and housekeeping. A guest locks him/herself out. Another is arriving late; it’s midnight and they can’t find the property. Guess who’s going to get those calls?
A third option is to enlist the help of one of those popular online platforms I mentioned, which takes the burden of reservations off your list of responsibilities. But, remember, they are limited in what services they provide. You will still largely need to manage your property. And, they too, will charge a fee. The fees are typically less than a property management company, but so are their offerings.
It may sound as if I am promoting professional property management. I’m not. If you want to try it out, go for it! Just be sure to investigate all it’ll entail and work hard to get good contractors to help you. If you like the idea of turnkey, that’s great, too. Just make sure to interview more than one company so you can see what each offer and what costs may fall outside of your contract. Either way, renting a property can be a great way to increase your overall income which is almost always a good thing!
Real estate questions? Reach out…I’m here to help! #justaskjillian
Jillian A. Mills, REALTOR®