The Hidden Challenges of Managing a Short-Term Rental with Guest Mark Severino

This article is transcribed from Episode 18 of The Accidental Landlord. Listen to the full episode here.

TODAY WE WELCOME MARK SEVERINO! 

Thank you for having me. I'm a real estate investor here in Dallas. My company is Best Texas House Buyers, and I've been in this sector for a long time. It has been a family business even before I went to college. Over a decade ago, my first personal investment was in the house hacking space to help me live. 

WHAT'S YOUR PARTICULAR STRATEGY FOR HOUSE HACKING?

I knew about house hacking and was looking for a way to offset the cost of living. It started when I was back in Florida. I bought my first property, which was this ancient house, full of damages. At this moment, I was starting my career and wanted to save as much money as possible. So I turned part of the house into a unit. So I started renting it out to pay the mortgage. It was successful, so I did the same thing in Dallas.

WHAT MADE YOU SAY, "I WANT TO GO INTO AIRBNB RATHER THAN TURN MY PROPERTIES INTO SHORT-TERM RENTALS"?

After having my house hacked and managing my properties, I thought it was time to change the game into something where I could make more money but spend less time on it. So, I thought to buy a property, furnish it, and then find a third-party property management company specializing in short-term rentals. That way, I would move out of the equation and be the owner. 

I IMAGINE YOU WENT THROUGH MUCH RESEARCH TO MAKE THIS DECISION. AFTER GOING THROUGH THAT PROCESS, WHAT HAPPENED NEXT?

I launched my Airbnb at the right time in January 2020, and of course, I had no idea that a pandemic was coming. The first two months were successful, but when the pandemic started, AirBnB said, "we are going to stop all of the short-term rentals." So, the fortune of this property is that it was in the duplex I was living in Dallas, Texas. However, I wanted to be put in charge a third-party property management company, but at the same time, I wanted to have the liberty to know what was going on at a certain level. 

IF YOU WERE LIVING IN THE SAME PROPERTY THAT YOU WERE PUTTING IN AIRBNB, WHY DID YOU SEE VALUE IN REMOVING YOURSELF FROM THE OPERATIONS?

The first reason is that real estate is my secondary source of income. I have a full-time new job, so I couldn't always be there washing the sheets or being the guy who welcomes the next person, etc. So there had to be another layer of professionals that could give that value. So the thing with Airbnb and short-term rentals is that they are hospitality companies where you provide the keys to your properties and take care of the rest. 

WHAT TYPE OF COMPANY DID YOU HIRE? 

Unfortunately, my first experience with a short-term rental property management company was not good. I hired them because, according to their reviews, they were very professional, but I want to give them the benefit of the doubt because we were living in unprecedented times, but they were not doing their job at all. Sadly, I had negative reviews thanks to their lack of effort on my property. 

I IMAGINE THESE NEGATIVE REVIEWS AFFECT YOUR INCOME. 

I'm a fan of short-term rentals whenever I'm traveling, so the first thing I do before renting is checking out their reviews. If my property had bad reviews, it was going to affect it. 

If you want to learn how Mark addressed his problem and became a successful short-term rental owner, listen to the full episode here.