Let’s face it! There is no get rich fast scheme within the Airbnb world.

Vacation Rental Property

Just the time it takes to find, buy and close on a real estate property takes enough time. But when we factor in the time it takes to set, up, run and manage a vacation & short-term rental, we must question whether or not it can truly ever become a passive income model.

In my opinion, the answer is not really.

Its probably why some of the big wig management companies are getting out of the biz and closing their doors to the properties whose numbers just don’t make sense financially when all is said and done.

When all is said and done, means that all expenses are taken out including:
property taxes
income taxes
business expenses (like toilet paper, furnishings and bed sheets, lawn mowing)
utilities (like, wifi, electricity, water)
mortgage
insurance
incidentals (deposits & the unexpected)

and the big one:

PROPERTY MANAGEMENT FEES which typically run around 20-40%.

Why so high you may ask? What is included in short-term rental management?
Its mostly customer service and communication! A whole lot of it… Its like a hotel or a 24/7 concierge service.

We hosts must:
Accept Booking Inquiries
Manage Mulitple Bookings
Price Adjustments & Special offers
Customers at all hours of the day.
Check-ins & Check outs
Giving and Asking for Reviews
Managing Cancellations
Automation Tools
and more…

Bottom line? The amount of time required to outsource property management takes a huge hit on profits.

There are only a handful of short-term rental automation tools to automate and scale your business out there on the web. So I think that the reality is pretty obvious that is is business for the mom and pops and solo entrepreneurs, which is actually pretty cool. It means that the hedge funds, wall street and the big wigs don’t have an interest in dominating this industry. I have heard some investors with millions to invest are putting together a fund for a management company to handle it, but these are few. The rest are smaller entrepreneurs and independent companies riding the short-term rental wave as far as they can or until it becomes more regulated. After all, who wants to be in the hotel/motel industry? I suppose this is a grey area for those that really don’t mind running hotels… But for most of us, we are satisfied with some creative solutions to build our real estate pipeline as mini-hoteliers.

Until then, I see this as an industry that is designed for the people, by the people.

That’s why I like to call this the short-term rental revolution TM.

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Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Stay tuned for my next blog: Airbnb Property Management Hack
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