Is a cabin rental management company worth the fee?
If you plan on renting out your cabin to potential guests, you have two options; manage the cabin yourself or use a cabin management company.
If you have considered managing the cabin yourself, you’re not alone. After all, the thought of keeping all of the revenue your cabin will generate sounds overwhelmingly enticing.
The biggest advantage of managing your cabin yourself is that you’ll avoid paying a management fee.
But, did you know, the cost of self managing has to come from somewhere?
Is it your time? Your peace of mind? Your energy? The value of your cabin?
As an example, lets take a look at your goals and revenue expectations.
Let’s say that you have set a goal to generate $100k in gross annual revenue for your cabin. Based upon our research, we have found that this equates to roughly 10 hours of work per week, not including scheduling maintenance, housekeeping, vendors, etc.
Now ask yourself this question. What is your billable rate?
If you’re earning an annual salary of $100k, your personal average billing rate amounts to $50 per hour.
Cabin rental management is a full-time job. It’s 24 hours a day, 7 days a week - nights, weekends, holidays, when you’re on vacation, etc. Your guests don’t care if you’re asleep or having dinner with your family, they want customer service, and they want it now.
At 10 hours a week, you will spend about 520 hours a year just making reservations and keeping up with your reservation calendars. If we multiply 520 hours per year by your hourly billable rate, you’re spending $26,000 worth of your time and energy just keeping up with reservations.
$26,000 with a revenue goal of $100,000 for your cabin, equates to a management fee of 26% - and we haven’t even calculated the additional costs you’ll be facing yet.
To reach your goal of $100,000 in revenue, there will certainly be marketing expenses, housekeeping expenses, maintenance expenses, online booking fees paid to booking websites (VRBO, AirBNB, HomeAway), linen costs and replacements (plus laundering expenses), trash removal, supplies for the rental (toilet paper, trash bags, soaps), accounting costs to track your income and expenses, plus many more items that we haven’t even touched on.
Considering the time, money and expenses, it is advantageous to explore your options of partnering with a professional management company to oversee your cabin rental. We invite you to learn more about us, our services and our management fees to see if we’re the right fit for you and your Smoky Mountain cabin.