Airbnb Management Fees

25 Replies

For all you Airbnb investors/managers....

What is industry standard for Airbnb management fees? Would love to hear from you as a host, or you as an investor paying someone to manage/paying yourself to manage? 

Thank you in advance :) 

I manage my Vrbo /Airbnb myself so there is no additional fees for a PM. This makes the numbers work, where as paying a PM 30% would tank the profitability.

Originally posted by @Jordan Hanks :

For all you Airbnb investors/managers....

What is industry standard for Airbnb management fees? Would love to hear from you as a host, or you as an investor paying someone to manage/paying yourself to manage? 

Thank you in advance :) 

From what i’ve heard, 30-40% PM fee nationwide is pretty standard. That’s why everyone self-manages now!

In Nashville the average is 18-20%, but some people are starting to offer at 10%. I'm not sure I'd trust any management company that would only charge that much. Managing an STR a very hands-on 24/7 job if properly managed with a decent occupancy rate. Nashville average occupancy rate is 80%.

The company I work for is based in Nashville and we charge 20%. Keep in mind the owner still has to pay for lawn maintenance, utilities, cable etc... Out of the 80%.

We manage STRs in Nashville. We charge 10-15% depending on how much the STR brings in. Although it's "hands on," it's mainly supply and demand. There's not many licensed VLS firms out there who can manage STRs in Nashville right now, but there's a lot of STRs that need management. Paying 18-20% is pretty absurd, but that is "standard" mainly because you don't have too many options. We try to reduce that down to make it a profitable investment for our investors.

You guys are making me salivate, my STR gets maybe 20% occupancy. Now summer is fairly good, but winter stinks. I try to get traveling nurses in the winter but only limited luck. Since winter is like 8 months here, you have to do really well in the summer to make it work. I am slowly picking up some repeat customers. Our tourism in the winter is almost nothing. Location location, location.

@Jordan Hanks - Some companies including Evolve Vacation Rentals charge 10% for booking and marketing, with extra fees for cleaning, re-stocking, etc. I self-manage my own furnished rentals. But I also provide full management for a couple of others for 10-20% depending on minimum length of stay (since 30+ day stays require much less work for guest changeovers). I think that 25-30% is outrageous unless the company is doing an outstanding job increasing your occupancy rate compared to AirBnB, HomeAway/VRBO and other popular sites for properties in your area.

I own a management company, and we charge 20% - 25%. We make more money for our clients than we charge them. Meaning most our clients saw an overall 25% + spike in revenue after we started to manage their unit. That is why we are busier than we can handle. last year we were managing 6 units, now we are managing 34 units. When a professional is running the pricing, the schedule, and the guest services, you would be shocked to see how much 1 unit can actually make. All of the part time, or one-off STR owners just don't have the same experience to achieve actually optimized STR results. I have hosted 1500 check-ins on my Airbnb account in the last 3 years, and have learned a lot. I can't wait to see what I can learn on the next 1500 check-ins!

Originally posted by @Benjamin Vail :

I own a management company, and we charge 20% - 25%. We make more money for our clients than we charge them. Meaning most our clients saw an overall 25% + spike in revenue after we started to manage their unit. That is why we are busier than we can handle. last year we were managing 6 units, now we are managing 34 units. When a professional is running the pricing, the schedule, and the guest services, you would be shocked to see how much 1 unit can actually make. All of the part time, or one-off STR owners just don't have the same experience to achieve actually optimized STR results. I have hosted 1500 check-ins on my Airbnb account in the last 3 years, and have learned a lot. I can't wait to see what I can learn on the next 1500 check-ins!

 Very cool, Benjamin.

Now, does managing an STRf for 20-25% also mean cleaning, laundry, re-stock, full turnover?  

I've considered buying or converting a few of mine to STR, but dont want a cleaning and laundering job. Thanks for any clarification.

@Steve Vaughan  The guest pays a cleaning fee, that we pay our cleaning crew. The 25% is based on the revenue after cleaning fees, and includes laundry, re-stocking and all other activities needed. We also have a 24/7 guest services team! 

@Benjamin Vail what's the average occupancy rate in Columbus for STR? I'm looking into maybe getting a few of these running myself.

We charge 25% for full service management, but the norm in my area is 38-50% (!!). There are a couple newer companies charging something like 18% but they make the owners purchase their own supplies (TP, paper towels, toiletries, etc) and have all kinds of "additional fees" that seem to put them in about the same range when you take everything in to account.

Hey @Matt P. I think the average is about 62% across the city. If you want a high occupancy rate, we could easily be in the 90% range here in Columbus (with lower prices). However or team has changed our pricing strategy to optimize for total revenue, and 75% occupancy is actually where we want to be to achieve optimal monthly revenue. Our houses were in the 85% range last year, and now we are consistently around 75% occupancy. Columbus is one of the best STR cities in the US, especially now that the city passed STR friendly laws. We are one of the largest STR management companies in the area, and we would be happy to help you get started If you are interested.

@Benjamin Vail I sent you a colleague request. We should talk sometime. Am I correct in stating that the only thing I would be responsible for is coordinating and managing repairs to the actual building if I were working with your company?

@Jordan Hanks I agree that if you can self-manage you will make the best return. However, I understand that sometimes due to time constraints it's actually better to hire a professional manager. I am down on the Panhandle of FL (Fort Walton/Destin). I manage my own and also manage for others. I charge between 15% to 20% of gross rentals. The lower % is for larger properties and when owners are involved more. My fees are on the low end because I only manage on Okaloosa Island so I can personally go to each property and carry very little overhead. I have seen management fees vary from 10% to 35% of gross rental income. Some things to consider are: if minor maintenance is included, if they file the occupancy tax on the owners behalf, if they hire the cleaning service and if they "eat" the credit card fees or pass them onto the owner. If someone charges 10% management fee but then nickel and dimes you for every light bulb they change that actually ends up being more expensive than if you pay 20%.

A side note here... Airbnb is just one marketing venue for an STR/Vacation rental. There's HomeAway, FlipKey, etc and also you can market totally on your own website if you have an established list of guests. For some markets VRBO is better than Airbnb, and the reverse is true too.

benjamin,

I own a unit in a popular area of the panhandle. The company I switched to in December was on site and thought b/c of that they would rent. Here it's April and they don't have the busy weeks of summer booked much at all. I'm paying 25%. I have called and bothered the heck out of them and reminding me what they would be getting for the unit and still tell me that will happen ...well if it didn't happen in the spring and the bookings are light in summer there the year goes. I am looking at another unit and can't decide if I should find another property manager or go it myself. To make money you have to get a good loan and leverage, appreciation hopefully, HOA can't control and keep it rented. I have listened to some podcasts that highly recommend STRs and very lucrative and buy more. i need to figure out the financing as opposed to paying cash. Cash takes some of the guess work out of it but then you've reduced your spendable portfolio.

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We manage STR's on the Gulf Coast from Clearwater all way down to St Pete Beaches. We Charge 18%. 18% does not include the cleaning fees or supplies. As a host your listed fees should cover the cleaning person plus give you a little margin, If you are making an extra 3-5% on that fee , than our cost is only 13% - 15% . We manage inventory , are hospitable and curious with your guests , manage any maintenance issues and prep rooms for the next guests while insure you obtain or maintain a Superhost status -- I think that is very a fair tradeoff , If you listing cant afford that 15-18% than maybe that property is not pulling the numbers it ought to be.

You can absolutely save the 18% and run it yourself , but than it would be like owning a Snapple route with a truck and driving it yourself .. Many people prefer to be in the office and let soemone else do the driving ..   Management makes it Turnkey , Self hosting makes it a job.. 

The main thing is to enjoy what you are doing in life  !! If you enjoy hosting - go for it ,, if not get someone too or get a Long term Tennant.. 

Originally posted by @Eric P. :
Originally posted by @Jordan Hanks:

For all you Airbnb investors/managers....

What is industry standard for Airbnb management fees? Would love to hear from you as a host, or you as an investor paying someone to manage/paying yourself to manage? 

Thank you in advance :) 

From what i’ve heard, 30-40% PM fee nationwide is pretty standard. That’s why everyone self-manages now!

 So, 30-40% of the profit or revenue?

Following....I will be managing 4 high volume units - and I am looking for a mentor! 

We pay 30% which I though was very high. Our intent when we bought it was to take over management but it turned out the company we use does such a great job keeping it booked all the time with zero headaches that we've decided they are more than worth it. Our biggest problem is that it is booked so often we never get to use it.

First of all, the "increased revenue" that a prop Mgr claims they can get is noise

ANYONE can do that without a prop manager. You list on all the majors ABB, BDC, HA/VRBO, FlipKey, website, Craigslist. 

Run it through a good PMS (freetobook, guesty, ownerrez, smartbnb). Invest the time to perfect your legal agreement, email templates & triggers. 

Don't do it remotely especially in the beginning. 

Avoid evolve, vacasa etc. They also slap fees on your guests if they seem cheap. And they don't do it all. 

There is NO reason to hand 30% to someone else! 

@Jordan Hanks I cohost a few different local listing and offer consulting to others getting started.

My fees vary depending on what is needed. However, my fee is form 15-18% locally. And that’s profit sharing. Monthly.

I also own the cleaning service. So yes it works out well on the money end BUT I also have more control over the (arguably) worst part about running a rental. The cleaning. It’s also the most complaints.

So, I handle everything. And we negotiate fees along the way for new items.

My owners are super happy. I keep them at superhost status. We have return renters. And my tailored pricing strategies seem to be working great. (I’m seeing 30% increase in revenue YOY 2018-2019)

The fee depends on the market, but in most tier 2 markets and below the industry average is around 20% of the net rental income (after booking platform fees), plus the guest-paid cleaning fee. Tier 1 or tourist destinations can be as high as 35%. 

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