and<\/em> that has lax regulations and buy-in from a landlord is the toughest part.<\/p>\n\n\n\nProperty Management Model<\/h2>\n\n\n\n
Another short-term rental business model you can use to make money without owning property is to manage other people\u2019s properties. This is a good solution in places where rental arbitrage is not legal. In most places, the owner of a property will be allowed to run a short-term rental operation, and you\u2019ll only be on contract as a manager.<\/p>\n\n\n\n
You can identify and partner with individual property owners who want to list their properties but who don\u2019t know much or don\u2019t have time to run it. These partnerships can be structured anywhere from a 50-50 split to an 80-20 share. It\u2019s wholly up to you and the landlord to decide.<\/p>\n\n\n\n
This model helps hedge against regulation and makes it far easier to scale more quickly. <\/p>\n\n\n\n
Advantages of the property management model<\/h3>\n\n\n\n
The main advantage of this model is that you can scale very quickly. You don\u2019t need any upfront investment at all. As soon as you find a property owner that wants to work with you, you can start immediately. <\/p>\n\n\n\n
That means you don\u2019t need any time to save for the next property. You can onboard 10 properties in one week if you wanted to. On top of that, you have very little risk involved. If anything happens and the property isn\u2019t right for short-term rentals anymore, you can pack up and move on to the next unit without losing money.<\/p>\n\n\n\n
You don\u2019t have to deal with any contracts or any responsibilities for being a tenant or an owner. You get in, do the work, and get out. <\/p>\n\n\n\n
Disadvantages of the property management model<\/h2>\n\n\n\n
There are fewer disadvantages to this model, but one reason it\u2019s unattractive to some short-term rental entrepreneurs is that the profit potential is the smallest of all the models. On average, most property managers take only a 20% cut. So in the above example of a rental property that would cost normally $1,500\/month, instead of taking home $2,000 a month, you\u2019d take maybe $400. <\/p>\n\n\n\n
You\u2019d need to manage a lot more properties to hit $20k months. <\/p>\n\n\n\n
Another disadvantage is that in this model, the owner of the property is your client, and you need to keep them happy. You won\u2019t only be marketing to guests, but also to property owners. They might not like the way you\u2019re managing the property or they might suddenly decide to use the property for other reasons, like hosting their mom who\u2019s in town for the weekend. <\/p>\n\n\n\n
Choosing your path to operate a short-term rental property<\/h2>\n\n\n\n
Ultimately, the business model you choose will be up to you. You may have money to invest and want a bigger profit, or maybe you want to start scaling immediately. Each model has their benefits, and neither requires you to own property to start.<\/p>\n\n\n\n
Which will you choose?<\/p>\n\n\n\n
<\/p>\n\n\n\n
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Purchasing real estate for investment looks like a goldmine from the outside, but once you get into it, you\u2019ll notice the landscape that looked magical is suddenly studded with hidden landmines. Long-term leasing may be secure, but you have to deal with tenants (who could destroy your property), and it doesn\u2019t have as much profit […]<\/p>\n","protected":false},"author":2,"featured_media":20878,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[232,259,260,261,262],"yst_prominent_words":[],"class_list":["post-20877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate","tag-property","tag-property-management","tag-property-rental-model","tag-rent-property","tag-renting"],"_links":{"self":[{"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/posts\/20877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/comments?post=20877"}],"version-history":[{"count":1,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/posts\/20877\/revisions"}],"predecessor-version":[{"id":35473,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/posts\/20877\/revisions\/35473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/media\/20878"}],"wp:attachment":[{"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/media?parent=20877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/categories?post=20877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/tags?post=20877"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/lifeyet.com\/wp-json\/wp\/v2\/yst_prominent_words?post=20877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}