Help a self-managing homeowner pass off all work to a professional Airbnb manager while making more in guaranteed rental income.
Richard is a retired dentist in Jacksonville, Florida. He and his wife decided to invest in a triplex on the north side St. Augustine in the mid-70’s, and they have been proud vacation homeowners for over forty years since then.
The unique vacation home consists of three townhouse units.
Sitting on top of a 35-foot dune, the home has vast 10-foot ceilings and a huge sunroom with unobstructed views of the ocean.
For 20 years, the couple self-managed the vacation rental. Richard took care of the property maintenance and paid the bills while his wife was in charge of communication with prospective guests. As Richard was in the process of building his growing dental practice and his wife was a manager at a phone company, they found it extremely hard to find the time to manage the three units.
To find guests, the couple promoted the home on all the major vacation rental sites like VRBO, HomeAway, FlipKey, and Airbnb. The volume of inquiries, however, only kept Richard’s wife on the phone all the time. Richard said, “My wife and I had a fair number of repeat customers, but we still had a lot that we had to rent each year.”
And not only were the booking and guest screening processes tedious; they also managed the turnover period between guests. Immediately after the guests’ 10 o’clock check-out time, both Richard and his wife would go to the vacation home to do laundry, clean the home, make beds, and do whatever else was necessary for welcoming the upcoming guest.
Once the couple reached their 70s, however, self-managing the home got to be more than they could handle. Richard and his wife hired a local company to help with the marketing. The company would take a 20% commission just for doing the marketing for them.
One day while looking at what they were being paid by the marketing company, Richard realized that the company had been charging him hidden fees for over a year. “We were really disappointed with them.” It was then that Richard knew he needed a change.
For years and years, she and I turned the building ourselves…Summertime was not a time when we could leave Jacksonville.
The first time Richard heard about Rented.com, a company that could help him generate a guaranteed yearly income while a professional manager provided turnkey service, he dismissed the idea thinking it was too good to be true.
At first, Richard didn’t understand how a manager could possibly o er him a guaranteed amount that was the same or more than what Richard was making by self-managing. A Rented.com representative, however, explained that the managers have many advantages over homeowners: With the benefit of scale, managers are able to take advantage of lower costs that they incur because of volume of homes they manage. Additionally, with more advanced technology than typical self-managing homeowners, managers can likewise use algorithms to price dynamically based on local demand and competition, automate processes to save time, and more.
Overall, this results in more profit.
And so, Richard reconsidered the model. Through Rented.com’s marketplace, he could pass off all of the work associated with self-managing while receiving a guaranteed income. “The most compelling [part of the Rented.com model] was the guaranteed amount.”
Richard decided to get started by receiving guaranteed income offers from managers with local demand.
The first step for him was to create a profile on Rented.com’s site that the managers could use to place their offers. He worked with Rented.com Director of Homeowner Success, Paul Liguori, to create a private profile for the property in rented.com’s marketplace where managers would bid on the right to manage the home.
Paul stayed in touch with Richard throughout the process, advising Richard and answering any questions he had about the process.
Online, Richard was able to watch as the bids came in.
The highest bidding manager estimated that each unit in the triplex might bring about $51,000 in retail rates over a year. After paying for expenses like marketing, booking, occupancy taxes, maintenance, cleaning, and home essentials like linens, the management company estimated that this would leave them with about $33,333 per unit. As the management company would take on those expenses without charging Richard, they decided to offer Richard a total of $99,999 ($33,333 for each unit).
Richard was offered more in net annual income in the rented.com marketplace than he made by self-managing.
After the week-long bidding period ended, Richard decided to accept the highest bid. The management company was one of the largest in the country, and after meeting the local employees, Richard was sure that they’d do a great job managing the property.
I was impressed enough that I signed a deal.
Although Richard is new into his term with the management company, he is already satisfied with the amount of time that the rented.com arrangement has freed up for him.
After so many years, it’s a nice respite.
No longer tied to the phones to answer questions from inquiring vacationers and current guests, Richard’s wife has had time to volunteer and see friends.
Richard has likewise enjoyed the time that he no longer has to spend working on the house, and the couple has been using their newly-freed summer to travel and spend time with grandchildren.
Richard has been impressed with the results of the deal so far:
I did the numbers on what I made last year. I’m getting a little bit more than what we did last year when we worked our asses off…
Obviously they know what they’re doing and are better able to handle it than my wife and me.
And that’s why Richard can now…
Relax. It’s rented.
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