self managing long distance real estate rental

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Tenesmus83
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Joined: Thu Nov 22, 2018 1:32 pm

self managing long distance real estate rental

Post by Tenesmus83 »

I've heard of some people do this but I don't know how they do it. I plan to purchase a condo for short
term rentals. Anyone with experience please kindly share. What software/booking service do you use.
Any resources that you can share?
boglerdude
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Re: self managing long distance real estate rental

Post by boglerdude »

Ask on biggerpockets

My self-managed long-distance rental was not worth the effort.
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unclescrooge
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Re: self managing long distance real estate rental

Post by unclescrooge »

Tenesmus83 wrote: Sun Aug 01, 2021 8:17 pm I've heard of some people do this but I don't know how they do it. I plan to purchase a condo for short
term rentals. Anyone with experience please kindly share. What software/booking service do you use.
Any resources that you can share?
Do you have experience managing any sort of real estate?
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Watty
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Re: self managing long distance real estate rental

Post by Watty »

self managing long distance real estate rental
Sounds like a bad idea. How will you check people in and check them out? Likewise what will you do when your cleaning service flakes out and does not show up?

It might seem obvious but be sure that short term rentals are actually allowed.

Many condo associations do not allow rentals of less than 30 days.

There may also be a restriction on if you can even rent a condo as a long term rental. The problem is that if too high a percentage of the condo units are rented then future buyers will not be able to get a conventual mortgage since mortgage lenders have a restriction about what percent of the units can be rentals. Just because other units in the building are rented does not automatically mean that you can rent yours since that might put the percentage of rentals over the limit.

Condo rules can also be changed. If there is a problem that is caused by someone renting their unit for a VRBO party then a vote can be taken and short term rentals can be prohibited.

There are some condos like at a beach where people buying them for sort term rentals is expected but they may be more the exception than the rule.
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lthenderson
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Re: self managing long distance real estate rental

Post by lthenderson »

Just thought I would include this quote from another recent thread posted by a landlord. This alone would scare me from any long distance rental situations.
SGM wrote: Mon Aug 02, 2021 8:00 am Tenant died in bed, but was not discovered for a week We have contacted insurance agent and a hazmat team.
I don't know how the inside of the house became such a mess. It is the worse mess I have ever seen. There is not a place to walk. The tenants couch is torn. Rug is cut up and piled haphazardly. An internal wall is broken. We have spoken to his son who said he was going to remove the furniture, but nothing has been done. The excuse is the son cannot find the car key. The cousin of the tenant thinks we should sue his estate. We have some indications he does have an estate, but this tenant has lied about many things, so he may just have been bragging. We may hire an attorney to learn if there is an estate and to sue the estate for damages. The police removed the body and we are following the procedure they suggested.

Any landlords been through this type of situation? We are open to suggestions.

We may sell the house when it is repaired as real estate prices have soared.
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cchrissyy
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Re: self managing long distance real estate rental

Post by cchrissyy »

In short term rentals, a lot of your success hangs on the local staff. They're the ones cleaning everything, making sure the windows are closed and the heat is off, taking trash cans to/from the curb, letting in the repairman every time a repair is needed, meeting the renters who lost their key or can't figure out the wifi, and reporting to you what items are missing or broken, which is basically every stay there's something. I'm not kidding, every single week there will be a broken glass, or stained towels to throw away, or coffee mugs accidentally(?) taken home.

And if anything is not smooth about that person's cleaning and service skills or how well stocked your place is, the whole world will know it from your reviews. If you are not going to do the hands on daily work yourself, then you should expect a significant cost for that person and lot of effort to finding them. I wouldn't recommend starting to look for a place to buy until you know who your local partner will be.
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manuvns
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Re: self managing long distance real estate rental

Post by manuvns »

Tenesmus83 wrote: Sun Aug 01, 2021 8:17 pm I've heard of some people do this but I don't know how they do it. I plan to purchase a condo for short
term rentals. Anyone with experience please kindly share. What software/booking service do you use.
Any resources that you can share?
there is no such thing called self managing rental unless you rent it to friends/family . better to charge market rates and hire a property manager . you may net 3-4% annualy .
Thanks!
59Gibson
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Re: self managing long distance real estate rental

Post by 59Gibson »

I'm not sure what kind of cap rate you're expecting with this venture, but if it were me I wouldn't get near it unless it was in the 15% range.
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unclescrooge
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Re: self managing long distance real estate rental

Post by unclescrooge »

59Gibson wrote: Tue Aug 03, 2021 12:49 pm I'm not sure what kind of cap rate you're expecting with this venture, but if it were me I wouldn't get near it unless it was in the 15% range.
+1
And that's after factoring 25% property management fee.
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AerialWombat
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Re: self managing long distance real estate rental

Post by AerialWombat »

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This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
goos_news
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Re: self managing long distance real estate rental

Post by goos_news »

I've had two short term rental properties, and I cannot imagine managing them from any distance over an hour or so.

a. you need to be accessible for problems your guests have (as mentioned) and the problems your guests cause
b. you will need to hire cleaners and those cleaners will need to be paid more if they are also in charge of tracking damage, loss, and wear.
c. as mentioned, if the only accountability for your workers are your reviews, your reviews will suffer and you'll seen diminishing income
d. you will effectively need someone to do minor repairs and maintenance, or at least flag them to you. In one case, we did the periodic minor stufff (restocking, touchup, etc) and the rental manager handled bookings, meet and greet, and arranging/managing cleaners/emergency repairs.

Some people make it work. It's a lot of extra work and time. It is far, far easier with long term rentals. The turnover in short term properties requires more attention.

One of our rentals netted over 15% after management fees and all expenses.
Carefreeap
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Re: self managing long distance real estate rental

Post by Carefreeap »

Tenesmus83 wrote: Sun Aug 01, 2021 8:17 pm I've heard of some people do this but I don't know how they do it. I plan to purchase a condo for short
term rentals. Anyone with experience please kindly share. What software/booking service do you use.
Any resources that you can share?
You need a local property management service. Many jurisdictions that allow short term rentals REQUIRE a representative able to reach the property within 2 hours to respond to complaints about noise, trash and parking. Coordinating bookings, cleanings and guest complaints is a job and well worth the fee for good ones. We've had a property in vacation rental service for over 20 years which is 500 miles away. During that time we've had five property managers with this last one being the best. No way would I try doing this remotely although I have property managed long term rentals from as far away as 6,000 miles.
Every day I can hike is a good day.
humblecoder
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Re: self managing long distance real estate rental

Post by humblecoder »

Tenesmus83 wrote: Sun Aug 01, 2021 8:17 pm I've heard of some people do this but I don't know how they do it. I plan to purchase a condo for short
term rentals. Anyone with experience please kindly share. What software/booking service do you use.
Any resources that you can share?
My wife and I are actually toying with the idea of buying a vacation rental. The intention is to stay in it ourselves for maybe 2 weeks out of the year, and then rent it for the remaining time.

Agree with the advice to read the biggerpockets.com forums. You'll probably get a lot more quality answers there, since that forum is specifically for real estate investment. However, be aware that real estate agents and management companies troll that forum for prospects, so I would be prepared for that if you post.

Based upon my research, there is zero chance I'd want to self-manage from long distance. Short-term rentals is much more labor intensive than long term rentals for obvious reasons. If we do go down this route, we are going to gladly pay the 20% or whatever management fee and factor that into our finances. Plus a good, experienced management company can add value through their booking systems, pricing models, marketing, customer service.

And if you do decide to self-manage, you'll probably end up a la carting all of that stuff anyway, for a price, so why not let somebody manage the property who has already put together a suite of software, processes, on-the-ground contacts?
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