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Self Hosting vs. Management Companies

Were you left in pure suspense from part 1 in episode 4 about host responsibilities? Don’t worry! Jonathan and Justin dive right into part 2 in episode 5! They break down the pros and cons of self-hosting versus hiring a management company for your short-term rental property. If you are starting or even growing your short-term rental business, have you determined if you are going to be self-hosting or hiring a management company? There are so many factors to consider when determining the right option for you.

Justin is still sporting his new chicken necklace that was gifted from a fan. Check out his obsession with all things fried chicken on the Selling Derby City YouTube show. Justin has a particularly memorable moment where he shows his love for chicken and chicken wings on camera.


Before diving into the episode, Jonathan and Justin share the upcoming podcast episodes and what you can look forward to in season 1. There will be guest episodes covering furnishing short-term rental properties, mid-term rentals, landscaping, tech and so much more.


Pros of Self-Hosting

Jonathan kicks off episode 5 by sharing some of the pros of self-hosting:

  • Going the extra mile- leaving special notes, small gifts for your guests if there is a special event, games for children, etc.

  • If you are detail-oriented, self-hosting is great because you have that connection with your property and you get to spend more time in the details.

  • Preventative maintenance- being proactive instead of reactive.

  • Savings- management companies can charge between 20-40% of the gross booking. By self-hosting, that is money that you get to keep.

Cons of Self-Hosting

Next, Justin and Jonathan both share some of the cons of self-hosting:

  • Geography- are you local to the area? Or are you hiring the right people to be the boots on the ground because you are not there?

  • Your vacation time- do you want to manage your short-term rental property from afar? Or do you want to unplug and turn off during your vacation time?

  • Cleaners- what if they quit at last notice or are sick? Do you have a backup plan? Do you cancel your guest and take a penalty? Or do you go there and clean the property yourself?

  • Linens- one of the bigger headaches to manage and keep up with.

  • The costs can add up- when you add everything up, does it make sense to self-host or to hire a management company?

" I've always told people that if you want to host yourself, or if you want to get into a new market, there are two things as you're going to need right off the bat- a good handyman and a good cleaner." -Jonathan Klunk



Now that we have gone over the pros and cons of self-hosting short-term rental properties, let's get into what it looks like to hire a professional management company to see if this is the right fit for you.

"One thing you might want to consider is co-hosting or professional management companies. There are great benefits to both. Again, if you are co-hosting with just one other person you can divide and conquer, take turns with different tasks throughout the day, or working with guests." -Justin Reid

"A co-host is somebody who lives locally in the area who is available to be added onto your listing so that they can communicate with the guests, they can see everything, they can see your cleaning schedule. And you will have a relationship in place where you pay them a certain amount for the service that they help you with." -Jonathan Klunk

Professional Management Companies

  • VARY GREATLY- have a lot of turnover and are not local to the area.

  • Have lower fees than a local management company- you get what you pay for.

  • They each have a different communication style- both with guests and owners

  • They use different inventory in the properties-may not be able to customize i.e. use organic products.

  • They have different cleaning standards

  • They have differing levels of attention to detail

  • They provide different reports

"Management companies have to streamline their services across the board. That is how they are successful. That's how they're able to scale. So you're going to lose some of the hands-on and special touch things that you might want to do. -Justin Reid

Who typically hires a management company for their short-term rental property?

  • People who cannot devote the time to perform the responsibilities of the host.

  • Apartment complexes that have occupancy to bridge the gap between mid-term and long-term rentals.

  • Real estate investors who want to create a portfolio and acquire multiple short-term and long-term rentals.

  • Out of state “snowbirds”- stay for 6 months and then go somewhere else for 6 months.

Other things to keep in mind when hiring a management company:

  • Rates- Management companies charge 20 to 40% of the gross revenue that is brought in. Plus the cleaning fee so that they can pay the cleaners and for all the supplies and everything that goes into that.

  • Reviews- management companies can reply and engage with reviews left on the short-term rental property. They can also contact sites such as Airbnb and VRBO if there are issues with the guest that they need to be aware of.

  • Inventory- the management company will handle all of the inventory. Knowing the products they use, will help you determine the cost or flat fee that you will charge.

  • Tax reporting- determine if the management company will assist with tax reporting that is required monthly to the city and state.

  • Additional needs- parking passes, weekly trash runs, koi ponds/aquariums, etc. Determine if your management company will also take care of these responsibilities or make other arrangements, as needed.

  • Repairs- know what your management company does. Do they have relationships in place? Will they be able to use your vendors? When will they contact you to see how you would like for something to be handled at the end of the day? How do they bill for their time and for that service? Do they pass it through to you with a simple charge for handling the scheduling or do they mark it up?

" So know what your management company does. Do they have relationships in place? Will they be able to use your vendors? When will they contact you to see how you would like for something to be handled? And at the end of the day, how do they bill for their time and for that service? Do they pass it through to you with a simple charge for handling the scheduling, or do they mark it up?" -Jonathan Klunk

Thank you for your interest in Selling Derby City. We enjoyed sharing our expertise on self-hosting versus hiring a management company.


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