“If you don’t have a Plan B, you don’t have a plan.”
About two months ago, when the property manager of my AirBnb completely dropped the ball, I was forced to manage it myself from a distance and I was stressing out. Luckily, I had relative who lived nearby help me out and I handled the guest communications. This worked out temporarily but I needed a permanent solution. As I mentioned in a previous post, having a backup plan is essential. Actually, it is also essential to have a backup plan for your backup plan. I had a few backup plans in place so I wasn’t too worried. It was not until those backup plans started to fall a part that I did start to worry.
“If plan A doesn’t work, the alphabet has 25 more letters”
Plan A: Find another person to manage the property. After listening to Biggerpockets and reading a post on Mr. Money Mustache, I learned that Zeona Mcintyre attained FIRE with her AirBnB properties and also successfully helped others manage them. I guess she takes FIRE seriously because I didn’t hear back from her for a while. Apparently she was busy traveling, but she did finally get back to me and looked over my property. Unfortunately, after her review, she told me that my property was not the right fit for her to manage. I’m assuming she generally manages higher end properties. Off to plan B.
Plan B: Rented.com. So this company says that they match short term property managers with owners who want their second home or vacation home managed for them. The company offered the standard commission based management structure but focuses on what it calla a “guaranteed rental contract,” where the owner would be paid a fixed monthly amount. The site has a calculator which estimated the monthly rent amount to be around $1400 which was great because market rent for a long term rental of one of my units would be $750. However, the person I spoke with at the company believed that the guaranteed amount would be slightly lower after he received more information. It took a week or two for the company to find a local property manager who was interested in managing it. She went to look at the house and it appeared that the guaranteed rent would be even lower than initially suggested. At this point, I wasn’t as sure if I liked this option as much but I was dealing with some issues managing the AirBnB from afar and it was still a strong consideration. Then I was told that the manager decided that she did not want to manage the property. Based on her profile, she mainly manages properties in a ski resort an hour south from my property so that may be why it wasn’t a good fit.
Plan C: Turn it into a long term rental. As I mentioned above, the property would rent for $750 per unit (it’s a duplex). That amount isn’t too bad since the rental income would cover all my expenses with a decent amount of cash flow to spare. However, from what I’ve heard, the tenant quality is not the best in that area. The other downside, which is probably the biggest downside, was that the property was already furnished and I spent a decent amount doing so. What would I do with all that furniture? This would be a last resort so let’s continue with Plan D!
Plan D: Self-manage. After I terminated my contract with the property manager, I was self-managing the AirBnB with the help of my relative for about a month. Things were going relatively smoothly and I received a few positive reviews. However, there were a few issues that came up which made me reconsider self-managing. A guest called me up at midnight with an issue with the air conditioner in one of the rooms. I was able to resolve that issue as well as another issue relating to a broken toaster the next day with help from my relative. I gave the guest a discount for the inconvenience. With another guest, he had some problems with the electronic keypad. I was on the phone with him for awhile on Labor Day while I was on vacation with my family. That issue was resolved, but I realized that I didn’t want to have to deal with these issues, especially when I was often helpless being so far away. I think if the property was very new and everything was updated, things would run smoother. However, it is an older house and while I did make a lot of repairs to it after I fired the property manager, things just go wrong more often in older houses.
Plan E: Contact other AirBnB hosts in the area. Having difficulty finding anyone willing to manage the property, I knew I needed to at least have a reliable cleaner. I contacted a couple of cleaning companies but they did not clean AirBnbs and many actually wanted to set up an appointment to give me an estimate and come back the following week! Wow! I’ve never hired cleaners before but that’s the first time I’ve heard of that policy. I contacted other AirBnB hosts in my area, but I assumed many wouldn’t want to give up that info as a reliable cleaner is gold to a short term rental host. However, most AirBnbs in the area are duplexes where the owner lives on one floor and rents out the other floor. They also often did their own cleaning so there was a chance they might want a side job, especially if the person was not employed, retired or working part-time.
One AirBnb host mentioned in his profile that he also manages other people’s properties. I spoke with him and he agreed to manage my property as well. Since he has taken over, a huge burden has been lifted from my shoulders as he has been great at taking care of issues. And there have been issues! However, things have calmed down and have been running smoothly. Things are going so well that I’ve even contemplating buying another property to rent as a short term rental!