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[00:00:00] Annette: Hello. Welcome back for another great episode. My name is Sarah Karakaian.
My name is Annette Grant. And together we are–
[00:00:05] Both Sarah & Annette: Thanks for Visiting.
[00:00:06] Sarah: And this is the–
[00:00:07] Both Sarah & Annette: Hosting Hotline.
[00:00:09] Sarah: Gosh, you have guard, almost, Annette.
[00:00:11] Annette: I know. I was like back to back. I got to get the voice down. All right.
[00:00:14] Sarah: I’m just going to play this. We don’t have a lot to go off of, but we think it’ll lent itself–
[00:00:17] Annette: We’re ready to talk about it.
[00:00:18] Sarah: We are ready to talk about it.
[00:00:19] Questions: Hi, Annette and Sarah. It’s Carrie from Voisey. I have several questions regarding properties that we actually own. A friend is managing and we are considering taking over the management. It is 14 properties and I would love your experience and help to determine if that would be a good move for my family. Thank you.
[00:00:42] Sarah: Carrie from Voisey, you didn’t give us much information. But we do love the question because there’s a lot of things to consider.
[00:00:49] Annette: First of all, what are the long-term goals for your family? Does this fit in there at all? I think this is something that should not be taken lightly. Sarah and I say this all the time, this is part-time, but all the time. And it’s really not part-time. You have 14 properties, but the reason we say that is the part timeness is you might go hours without a message and then all of a sudden there’s a ton and they’re all after hours. So just be very aware that you are on 24/7. You are taking over a hospitality business.
[00:01:18] Sarah: Now, can you implement some sort of control to that aspect? Yes. But we don’t know what the revenue is like. We don’t know are you excited for that part of the business? We don’t know are you taking over this from your friend because it’s not going well. Is it because you want a change of career and day-to-day focus?
Is this going to be a family affair? Do you have children that you can employ and get some tax benefits and have that play in and then you are managing your 14 properties with more tax benefits cause then you’re a real estate professional.
There are so many plays here, but Annette and I do love that you’re asking this question because it is not a decision to take lightly because if you are onboarding, like Colleen said, one of our team members who’s here right now, in a well-oiled machine, we want to understand that there are a lot of parts and pieces to managing multiple short-term rentals.
[00:02:11] Annette: Do they have a team? And monetarily, if it’s something where you’re like, wow, this can be a huge financial impact to our family, and sure it is, I mean, it’s 14 properties, let’s figure it out. But there was something I was just getting ready to– oh, the my one one tip if you do decide to go this way, please set up a separate management company.
So you want to own your properties and you want your properties to pay that management company. That is by far my one hot tip I do want to give you is set that up as a separate business out of the gate, so that way you’re paying yourself, that you have a separate liabilities there. But that’s my first piece of advice if you do decide to go the management route.
[00:02:51] Sarah: And I think the overarching piece of advice there too, Annette, you agree with this, is to let your CPA know that you’re planning to do this. Let your attorney know that you want to do this. Let your insurance company know you– talk to the three big partners in your life with your real estate business, and let them know your plans. Are you going to grow it? Are you going to hire anyone to help you eventually, or are you going to divvy up these responsibilities within your family?
You might change and pivot down the road. We’re not saying you can’t. But if you can give them as much visibility as possible, they can help you structure this at a way that’s going to benefit whatever your goals are.
[00:03:22] Annette: Mm-hmm. Maybe we’ll email you and have you on an episode so we can dig a little deeper into the why, because it’s going to be a big time investment for your family. I will tell you that. You can absolutely reap tons of benefits, but we do want to let you know there’s going to be a learning curve here. And you can always switch back. Like if you want to try it, if this has been pulling at you like, I want to try it. I want to try it. You can try it.
But I do want to advise you to give it a really, really long time to perfect it. Don’t dip in and dip out. It’s not going to be good for your properties. And then you’re probably going to have an interesting conversation with your friend. And so it could be a great conversation too, like do you need to take it completely over from your friend? Is there like a hybrid model you could do with them? I also encourage you to get really creative on what that looks like with this current friend.
[00:04:10] Sarah: I was going to try to look up the pockets episode, but we just had Veronica Romney on the show who did just that. She was a property owner, didn’t love the way her property manager was handling her property. She ended up actually firing them, then finding a company who was willing to develop a hybrid model with her. So again, we don’t know your situation, but if it’s something where you’re just not completely happy, maybe you can work something out too.
[00:04:32] Annette: Yeah, let’s do it.
[00:04:32] Sarah: With that, I am Sarah Karakaian.
[00:04:34] Annette: I am Annette Grant, and together we are–
[00:04:36] Both Sarah & Annette: Thanks for Visiting.
[00:04:37] Sarah: We’ll talk to you next time.
