Management Fees & Structure Questions

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Management Fees & Structure Questions

Josh Ball
Real Estate Agent · Louisiana · Member since 2017 · 215 posts · 149 votes

I've always managed my own properties or family members STR. I had someone approach me about hosting for them in a condo that I've got 3 units currently in & no idea where to even begin as far as fees, responsibilities, personal insurance, setup LLC, etc.

Can anyone lend me some insight into percentages, flat fees or how I should structure this if I decide to? Currently using Hostaway so I know there will be start up costs for these addition units if I elect to do it. Assuming I could pass that on to the owner?

This isn't a market with many STR, I manage the only 3 STR in the entire condo building currently. Small country town that is slowly picking up steam for its "Hallmark" feel but no other property managers to really compare to or base off of.

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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
2mo

Management is always dependent on your market, but I can tell you how I do it in Tampa FL which is currently a competitive market with a lot of management options from your friendly local Realtor to your nationwide mega company and everywhere in between.  

We offer full service at 20% and limited service at 10%.  

Full service consists of everything: pricing, marketing, guest communications, tax remittances, maintenance management and housekeeping management.

Limited Service is everything full is without maintenance and housekeeping management.

There are people in my market charging 15% and even lower for full service, but they are making it up somewhere else i.e. overcharging cleaning fees, charging booking fees, etc.  We feel its better to be transparent.

Hope this helps!

[email protected]813-563-0877
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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    2mo

    Management is always dependent on your market, but I can tell you how I do it in Tampa FL which is currently a competitive market with a lot of management options from your friendly local Realtor to your nationwide mega company and everywhere in between.  

    We offer full service at 20% and limited service at 10%.  

    Full service consists of everything: pricing, marketing, guest communications, tax remittances, maintenance management and housekeeping management.

    Limited Service is everything full is without maintenance and housekeeping management.

    There are people in my market charging 15% and even lower for full service, but they are making it up somewhere else i.e. overcharging cleaning fees, charging booking fees, etc.  We feel its better to be transparent.

    Hope this helps!

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
    WebsiteView Page
    3Reply
    • Josh Ball
      OP
      Real Estate Agent · Louisiana · Member since 2017 · 215 posts · 149 votes
      2mo
      Quote from @Andrew Steffens:

      Management is always dependent on your market, but I can tell you how I do it in Tampa FL which is currently a competitive market with a lot of management options from your friendly local Realtor to your nationwide mega company and everywhere in between.  

      We offer full service at 20% and limited service at 10%.  

      Full service consists of everything: pricing, marketing, guest communications, tax remittances, maintenance management and housekeeping management.

      Limited Service is everything full is without maintenance and housekeeping management.

      There are people in my market charging 15% and even lower for full service, but they are making it up somewhere else i.e. overcharging cleaning fees, charging booking fees, etc.  We feel its better to be transparent.

      Hope this helps!


       Great, thanks for this.

      1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2mo

    20% seems pretty standard for a boots on the ground local PM.

    3Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    2mo

    20% is common.

    1Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    2mo

    I charge 20 percent, but in small areas such as Red River and Angel Fire NM, it's 50 percent or more.  

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
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    • Jon Martin
      Member since 2022 · 1k+ posts · 1k+ votes
      2mo
      Quote from @Collin Hays:

      I charge 20 percent, but in small areas such as Red River and Angel Fire NM, it's 50 percent or more.  


       This is common Condotels as well. 

      0Reply
    • Michael BaumPro Member
      Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
      2mo
      Quote from @Collin Hays:

      I charge 20 percent, but in small areas such as Red River and Angel Fire NM, it's 50 percent or more.  

      This. In our area, full service is 40%. That is if I could even get them to do it as we are 36 miles down lake from town.
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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    2mo

    Josh, I’d treat this as two separate decisions: what exactly are you managing for the owner, and what are you charging for that scope?

    Before setting the fee, spell out whether you’re handling guest communication, pricing, turnovers, maintenance coordination, supplies, owner reporting, damage claims, and after-hours issues. If Hostaway creates additional setup or per-unit costs, I’d either pass those through transparently or build them into a separate onboarding fee.

    I’d also get the business side clean before taking the property on. Use a written management agreement, separate bookkeeping, and confirm the insurance, licensing, and local requirements that apply to what you’re offering.

    One tax piece I would pay close attention to is material participation in your own STRs. Cost segregation can potentially create significant accelerated depreciation, but creating a tax loss does not automatically mean you can use that loss against other income. If you do not materially participate and the activity is passive, those losses may generally be limited to passive income and carried forward until they can be used.

    That becomes especially important as you add third-party management work because you’ll want to understand how your time is being spent across the different activities. I’d have the CPA model the cost-seg benefit and the passive-loss impact rather than looking at the study in isolation.

    Happy to connect!

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  • Matthew Tregoning
    Property Manager · Melbourne, FL · Member since 2019 · 394 posts · 163 votes
    3w

    Already having three in the building is a nice head start. I'd agree up front on how much repair spending you can approve without calling the owner. A broken fridge on a Saturday gets awkward fast if you're responsible for the guest but can't make a decision.

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