What's the normal management fee % for short term rental?

Question

Just want to see what other firms are charging and their responsibilities included in the fee. Thank you in advance!

Paul Sandhu · Answer

I think it's more like 25-30 percent. I have 23 STRs with 83 beds. The only fee I have to pay is the monthly loan payment for my maintenance guys riding mower. $65/month, and he does all my mowing. I used to have a housecleaner that did it for free and I could sleep with her. Now she takes whatever she wants from the rent and leaves me with what's left. But I still get to sleep with her.

Villy Ellinger · Answer

I manage (and own some of my own) vacation rentals in Fort Walton Beach, FL. This is a beachfront tourist-driven area, the short-term rental industry is very well developed. The range I've hear is anywhere from 10% to 35%. I charge 15 % of gross. I provide all the full-service management items, but am very picky about selecting properties (and owners). Some of the larger companies here like Vacasa or ResortQuest or Southern charge well over 25%. They do not necessarily provide more for the property owners and in many cases they gross less than small, locally-owned boutique management companies. Higher fees are sometime due to higher overhead and large marketing expenses.Also, some of the larger companies carry in-house cleaning and maintenance services. Again, not necessarily better, just different option. I subcontract those as do most smaller agencies. I suggest that each owner evaluate each management company based on how they fit their needs as opposed to strictly on management fee %. A also manage several properties on a low flat fee basis with the owner being involved a lot more. That option lets the owner keep more revenue, but also requires them to participate more hand on. It is not necessarily right for every owner. Theoretically, some of the larger more expensive management companies should provide more sophisticated accounting and financial interface and reporting analysis. That is not always the case, so again you will need to verify.My two cents on automating: some items that are not "value adding" need to be automated so save time. However.... vacation rental management is very much about selling the EXPERIENCE, not just the property. Automatic email responses or any communication/interaction with guests needs to be done very cautiously. If a guests sends an inquiry which also includes a specific question like "where can a rent a pack-n-play" and they receive an automated response that does not address their actual question or give them the "feel" of live human communication, they will go elsewhere.

Account Closed · Answer

@Jingru Sui For LTR I see 8-12% alot and for STR it can range up to 15-25% depending on how much work load the management company has to take on. If possible, it may be better to try to automate your business the best that you can and just hire a cleaner that you trust who will also help be your eyes/ears. Then have a couple handyman you can rely on to fix any issues that arise. You will still maybe have 1 hour a week that you deal with things depending on the property but if it's all running smoothly then it's better than handing over such a large % to a management company. Also, depends on how many units you have, etc. If it's worth it to be hands off though bc your cash flow is still there then it's worth it.

Mike V. · Answer

In my market you won’t find any professional management companies under 30%. 35% is the norm and 40% isn’t uncommon. Some higher end property owners pay well over $10,000 a month in management fees. Blows my mind this is the norm here in Hawaii.

Colton Fairchild · Answer

@Jingru Sui 15 - 40% for STR. Depends on the area though.

Luke Carl · Answer

In my market it's all over the place. Anywhere from 10-40% the 10%ers have much lower occupancy so the numbers average out for the most part.

Paul Sandhu · Answer

@Jingru Sui Yes, I believe it includes the cleaning fee. The cleaning fee can also be added on to the rent. Suppose the place rents for $100/night, and there is a $75 cleaning fee. 2 nights would be $275. 7 nights would be $775. You get the idea.

Paul Sandhu · Answer

I don't believe it includes furnishings. It depends on what gets repaired, replacing a toilet flapper = no fee. Replacing a main sewer/gas/electric line = fee.

Michael Baum · Answer

There is a lot of guessing going on. I called Vacasa to see what it would cost to do full management of our North Idaho lake house. It was 40% of gross. That is a lot of dough. They would handle everything from cleaning, maintenance, listings etc. I would have to do zero work. Still too much. No chance of making any kind of profit.

Jermell Shavers · Answer

@Paul Sandhu. 🤦🏽‍♂️🤦🏽‍♂️🤦🏽‍♂️ WOW I spit out my coconut milk laughing so hard