Short term/vacation rental property management fee breakdown

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Short term/vacation rental property management fee breakdown

Amanda S.
Member since 2019 路 6 posts 路 6 votes

I recently started a STR/vacation rental property management business. What specific numbers do I base my management fee off? The language I have seen says I should charge a percentage of "gross proceeds". Do the gross proceeds include cleaning fees? Thanks in advance for the help!

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Luke CarlPro Member
Rental Property Investor 路 Tennessee Florida 路 Member since 2016 路 4k+ posts 路 5k+ votes
6y

Seems you should know this info well before you start a management company. Who would hire someone they doesn鈥檛 know the answers the questions you just asked? No one 

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  • Paul Sandhu
    Investor 路 The worst town to live in, KS 路 Member since 2016 路 4k+ posts 路 4k+ votes
    6y

    You can make your fee include anything or nothing at all, or something in-between.  Charge what your market can bear.  Make the services you provide worth the owners time/effort of not doing it himself.

    btw, this isn't a good time to be in the vacation rental property management business.

    1Reply
  • Luke CarlPro Member
    Rental Property Investor 路 Tennessee Florida 路 Member since 2016 路 4k+ posts 路 5k+ votes
    6y

    Seems you should know this info well before you start a management company. Who would hire someone they doesn鈥檛 know the answers the questions you just asked? No one 

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    6Reply
  • Paul Sandhu
    Investor 路 The worst town to live in, KS 路 Member since 2016 路 4k+ posts 路 4k+ votes
    6y
    Originally posted by @Luke Carl:

    Seems you should know this info well before you start a management company. Who would hire someone they doesn鈥檛 know the answers the questions you just asked? No one 

     I wanted to say that, but decided to let someone else to have the pleasure.

    3Reply
  • Ken Latchers
    Hatfield, PA 路 Member since 2012 路 1k+ posts 路 629 votes
    6y
    Hello. I plan to do oral surgery. Does this require any schooling? Is a high school diploma sufficient? I have my cosmetology license. Teeth, hair they are both on the same head.

    if I put some of my business cards in your vacation rentals, I can give you 10% on every victim, I mean patient...


    posted by @Luke Carl:

    Seems you should know this info well before you start a management company. Who would hire someone they doesn鈥檛 know the answers the questions you just asked? No one 

    2Reply
  • Collin HaysBusiness Member
    Property Manager 路 Gatlinburg, TN 路 Member since 2020 路 3k+ posts 路 4k+ votes
    6y

    It all depends on whether or not you want to operate ethically.  The management company space is crowded with mostly unethical people who are ripping homeowners off.

    As for my company, we charge 25 percent of rents.  Most management companies have also begun the practice of charging hefty booking fees that they do not share with the owners.  It's called rent shifting.  It's very unethical but most homeowners haven't the slightest clue.  Go to youtube and type in "vacation management companies exposed" for a short explanation.

    Most management cos also mark-up repairs and use their homeowner clients' cabins for up to 2 weeks a year for "administrative and marketing" purposes.  In other words, they use two weeks to barter for various goods and services.  I know one fellow who used a client's cabin for "administrative" purposes for several truckfuls of firewood as an example.  Same guy gave away one week per year of a client's cabin for a fellow to mind and manage his salt water aquarium. Goes on all of the time.

    I've got better things to do with my time than rip people off.  But those are pretty standard practices in the industry.  

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
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    1Reply
  • Mark Miles
    Rental Property Investor 路 Philadelphia, PA 路 Member since 2016 路 543 posts 路 716 votes
    6y

    WOW! Following this thread - it has the potential to be a lot of fun. And to think, I wasn鈥檛 a big fan of property managers  (aka glorified schedulers) BEFORE this thread was started 馃槄

    1Reply
  • Collin HaysBusiness Member
    Property Manager 路 Gatlinburg, TN 路 Member since 2020 路 3k+ posts 路 4k+ votes
    6y
    Originally posted by @Mark Miles:

    WOW! Following this thread - it has the potential to be a lot of fun. And to think, I wasn鈥檛 a big fan of property managers  (aka glorified schedulers) BEFORE this thread was started 馃槄

    I would rate most of my clients "fans":  Other than someone selling their home, I've had one (1) client leave for another management company since 2011. 

    If you think we are nothing but glorified schedulers, I invite you to a day of shadowing my manager the next time you are in the Gatlinburg area.  It might be enlightening.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
  • John UnderwoodPro Member
    Investor 路 Greer, SC 路 Member since 2014 路 13k+ posts 路 17k+ votes
    6y

    Are you a licensed PM?

    Or are you renting out properties that you are renting?

    0Reply
  • Mark Miles
    Rental Property Investor 路 Philadelphia, PA 路 Member since 2016 路 543 posts 路 716 votes
    6y
    Originally posted by @Collin Hays:
    Originally posted by @Mark Miles:

    WOW! Following this thread - it has the potential to be a lot of fun. And to think, I wasn鈥檛 a big fan of property managers  (aka glorified schedulers) BEFORE this thread was started 馃槄

    I would rate most of my clients "fans":  Other than someone selling their home, I've had one (1) client leave for another management company since 2011. 

    If you think we are nothing but glorified schedulers, I invite you to a day of shadowing my manager the next time you are in the Gatlinburg area.  It might be enlightening.

      To each their own. Some people like to have local property management services, and don鈥檛 mind paying a hefty fee, and for them that is fine.

    Personally, I outsource my property management to Asia for $4 per hour and I鈥檓 crushing it.  I own multiple houses & never had a single problem come up that made me wish I had a local property manager. Everything can be handled quickly via a simple phone call, text, or email from someone on my team in Asia

    https://www.biggerpockets.com/...

    0Reply
  • Collin HaysBusiness Member
    Property Manager 路 Gatlinburg, TN 路 Member since 2020 路 3k+ posts 路 4k+ votes
    6y
    Originally posted by @Mark Miles:
    Originally posted by @Collin Hays:

      To each their own. 

    correct.  

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    1Reply
  • Paul Sandhu
    Investor 路 The worst town to live in, KS 路 Member since 2016 路 4k+ posts 路 4k+ votes
    6y

    I self manage and deal with prostitutes, overdoses, petty crime and burglary, flat tires, jump starts, wild animal intruders, trips to the doctor, and a host of other things too numerous to mention with my tenants.  

    1Reply
  • Collin HaysBusiness Member
    Property Manager 路 Gatlinburg, TN 路 Member since 2020 路 3k+ posts 路 4k+ votes
    6y
    Originally posted by @Paul Sandhu:

    I self manage and deal with prostitutes, overdoses, petty crime and burglary, flat tires, jump starts, wild animal intruders, trips to the doctor, and a host of other things too numerous to mention with my tenants.  

    I'm sure someone in Asia could do that for a lot cheaper and then you'd be crushing it.  ;) 

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
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