DDespite the fees, good property managers take the hassle out of owning an investment property. In this clip from “Ask Us Anything” on Motley Fool Live, recorded on March 23Motley Fool contributors Matt Frankel and Jon Quast discuss the complementary relationship between Airbnb (NASDAQ: ABNB) and Vacasa (NASDAQ:VCSA) and explain the value each company offers to real estate investors.

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Matt Frankel: Vacasa is a full-service property management company. Airbnb is a booking platform. Vacasa is a full-service vacation rental manager. If you list a property on Airbnb, you will not only need to determine your cleaning costs, but also coordinate cleanings. You’re going to have to communicate with your guests, handle complaints, handle questions, things like that. Owning an Airbnb property is work. It’s a work. Companies like Vacasa charge a much higher percentage. As you mentioned, Airbnb’s participation rate was around 3%. The typical vacation rental property manager charges 30-40% of the rent, but does it all. They coordinate cleanings, they make sure there are plenty of towels, cups and glasses, and all those other things the Airbnb host should be doing. They don’t make a job out of it. My vacation rentals are professionally managed and my only interaction with my property manager is that I receive a check once a month. I have no interaction with my tenants. I’m sure there are good ones and bad ones. I’ve dealt with bad tenants in long term rentals. I have no desire to do this frequently in vacation rentals. I had someone steal my lamp the other week and my property manager totally took care of it. That’s what Vacasa does. Vacasa is not a competitor of Airbnb. This is a very important point. Vacasa just went public, by the way, VCSA. They are the #1 active property manager for vacation rentals. They have about 3,500 vacation homes, a market share of about 1%. Very fragmented industry. It’s just a really interesting company because you know what Vacasa’s #1 booking source is? Airbnb. Number 2 is Vrbo. [Expedia (NASDAQ: EXPE)] They are therefore not competitors. Airbnb wants platforms like Vacasa to succeed because one is 35,000 listings on its platform from a single client. They want these great property managers to succeed. Vacasa is more than willing to give up 3% in order to get 30%-40% of the rent in order to list on Airbnb. It’s a great relationship they have. It’s not necessarily a matter of competition. Hope this helped a bit.

Jon Quast: Just to add to what you’re saying, Matt, the reason Airbnb would be so excited for a company like Vacasa to succeed is because they need more hosts on their platform. They are limited in terms of supply. There is a lot of demand and not always enough supply to meet it. When you have successful property managers, it really opens up the possibilities. A lot of people, where they are, might not make sense to own a property that you use as a short-term rental, as a vacation rental. For me, for example, where I live is ideal about 30 minutes from my home to own a vacation rental, but I don’t know if I want to make that 30 minute daily commute to manage myself -even the property. A property manager really makes sense and it opens up, if I have a property manager I can have a property anywhere it makes sense. It really opens up the possibilities for potential hosts, people who want to use their money to invest in a property like this, and it increases the supply for a company like Airbnb and it helps them meet the demand. This is why they are complementary.

Frankel: Yeah. If it weren’t for the vacation rental managers, I wouldn’t have mine in Orlando, which is a six-hour drive from my home. It wouldn’t be practical. It’s a great relationship between the two.

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Jon Quast owns Airbnb, Inc. Matthew Frankel, CFP® has no position in the stocks mentioned. The Motley Fool owns and endorses Airbnb, Inc. The Motley Fool has a Disclosure Policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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