There’s been a lot of discussion about VACASA in recent days, and I wanted to explain “how” successful (or not -- the company is bleeding red ink and the stock price is down 57% this year) this publicly-traded company can be, by only charging homeowners 20 percent.  The answer is that they cannot. They need more like 35 to 40 percent. I will explain" how" they get their 35-40 percent, and I have posted a sample booking to demonstrate it.

This cabin sleeps 7 and is priced at only $224 per night in a fairly busy season. That’s way too cheap and I’ll explain the “whys” of that: VACASA needs revenue to make their math work. So they add on a booking fee of $126, and a “limited damage waiver” (junk fee) of $45. VASCASA is only sharing with the homeowner the rent, not the junk fees. So at 20 percent management fee, the owner is receiving $179 per night.  Because of all of their junk fees, VACASA then has to LOWER the "rent" to make the grand total palatable to guests.  Effectively, they've moved some of your rents into their junk fees.

With the junk fees, VACASA has added $57 per night to the cost of the guest’s reservation. So the “real” rent isn’t $224 per night, it’s $281 per night. The homeowner is receiving $179 of that, or 64 percent, and VACASA is receiving 36%. That is their true management fee.

But wait, there’s more! VACASA charges the homeowner a credit card fee of 3% for 80 percent of the rents that they charge, PLUS the cleaning fee! That represents a 100% mark-up on VACASA’s credit card fee – which is approximately 1.5%.

Whether you self manage or hire a property manager, don’t get too carried away with promises from anyone. These situations are basically just a new twist on the old "bait and switch" game.  

Find out what you’re actually going to get in return for either the investment of your time or your money.