Property Manager Fees -AirBnB

St. Petersburg, Florida
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Property Manager Fees -AirBnB

Joe KernPro Member
NYC · Member since 2018 · 39 posts · 16 votes

Hello All - just finished setting up and putting my first short term rental live on Airbnb. I just rented out most of the previous month , and agreed to pay the property manager 18% of the booking fee host payout so net of any guest service fees or occupancy taxes airbnb takes.  Now - I just noticed they are taking 18% of that (total payout)  which is inclusive of cleaning fee + nightly room fee (which is fine). But  They are also taking the full cleaning fee as well separately …is this normal practice? I feel like now the effective rate is much higher than 18% (closer to 30% +)  we agreed on… since they are taking 18% of the net total AND the cleaning fee sum. Any guidance would be helpful thanks! 

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Tim Baldwin
Attorney · Pensacola, FL · Member since 2023 · 178 posts · 106 votes
2y

I can understand why you're frustrated with that. But if your agreement defines "income" from the guest as any monies received by the guest, including fees, cost reimbursement, etc., then that's what you have. If the agreement doesn't define "income" from the guest, I think you have good grounds to discuss this with them to state, "look, the agreement doesn't define this, and it seems reasonable for me to understand that your 18% is not for costs incurred, but only for the income received"--or something to that effect. Best wishes. 

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  • Tim Baldwin
    Attorney · Pensacola, FL · Member since 2023 · 178 posts · 106 votes
    2y

    18-22% management fee is common in Florida for vacation rentals. What I question is the cleaning cost bringing your cost to 30% of the rental income...?

    0Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Tim Baldwin:

    18-22% management fee is common in Florida for vacation rentals. What I question is the cleaning cost bringing your cost to 30% of the rental income...?

    Hey @Tim Baldwin I guess I was under the impression 18% was the total covering the PM fees which included cleaning. Now that I’m paying 18% (which includes cleaning fee) then paying out the entirety of the cleaning fee as well feels like double dipping. The 18% in my opinion should be coming out of the net income - cleaning fee since that’s already going to the PM. Cleaning fee has been on average between $175-250 per booking. 

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  • Tim Baldwin
    Attorney · Pensacola, FL · Member since 2023 · 178 posts · 106 votes
    2y

    One thing I commonly see is that PMs charge the guest the cleaning fee. If they are charging you the cleaning fee, perhaps you should inquire why they are not charging the guest that fee. 

    2Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Tim Baldwin:

    One thing I commonly see is that PMs charge the guest the cleaning fee. If they are charging you the cleaning fee, perhaps you should inquire why they are not charging the guest that fee. 

    Thanks yea it appears the cleaning fee is being charged to the guest but being reported as part of my net take home. So he’s also charging the 18% on top of that while already taking the cleaning fee as well. Feels like a double dip scenario. 
    2Reply
  • Tim Baldwin
    Attorney · Pensacola, FL · Member since 2023 · 178 posts · 106 votes
    2y

    I can understand why you're frustrated with that. But if your agreement defines "income" from the guest as any monies received by the guest, including fees, cost reimbursement, etc., then that's what you have. If the agreement doesn't define "income" from the guest, I think you have good grounds to discuss this with them to state, "look, the agreement doesn't define this, and it seems reasonable for me to understand that your 18% is not for costs incurred, but only for the income received"--or something to that effect. Best wishes. 

    4Reply
  • Mark S.
    Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
    2y

    @Joe Kern The nightly charge and cleaning fee, as well as any other charges you add, are all lumped into revenue. Don't matter that they are called something else. And you pay the cleaner, the guest doesn't. Too many STR owners get hung up on the idea that cleaning fees are a ‘pass thru' to the guest. They aren't - they are a cost you incur and how you elect to determine what to charge the guest is a separate thing.

    1Reply
  • Allison Craft
    Property Manager · Tampa Bay Area · Member since 2023 · 34 posts · 20 votes
    2y

    Hey Joe, I know you posted this a month ago but just came across it. I would say I see this a lot nowadays. I understand what you are saying.. seems as if the PM is double dipping. I would push them on that and ask why? 

    I am local to St. Pete and Tampa and have my own boutique Airbnb management company here. I am an Airbnb owner myself and understand the amount of expenses that incur with a short-term rental and you feel as if your profit margins are getting smaller and smaller. 

    If you need any help or have someone more hands on and local, please reach out! 

    2Reply
  • Ahmed Omran
    Real Estate Agent · Belleair Bluffs, FL · Member since 2024 · 19 posts · 8 votes
    2y

    Hi Joe,

    This is normal, but we would only charge our owners 82% percent of the cleaning costs in your situation. We help manage Airbnbs for owners like you and found a way to avoid taking a percentage from the cleaning fee by adding our cleaners as Co-hosts with calendar access only. This way, the cleaning fee gets sent directly to the cleaners, and now we only get our percentage of the nightly rate instead of going back and forth with the owners collecting cleaning fees.

    I own and manage a few short-term rentals in Indian Rocks Beach, Largo, and Seminole. If you need any advice or help with your rentals, just let me know: I would love to help

    Thanks

    2Reply
  • Caroline Ramos
    Miami, FL · Member since 2024 · 1 post · 2 votes
    2y

    We operate a vacation rental management firm and the % would be on RENTAL REVENUE, not taxes, cleaning fees, pet fees, etc. We charge 20% for example and its just on rental revenue. Check your contract. Cleaning fees in my experience should not have a markup- ideally cleaning includes inspection, reporting damage, toiletry and linen service- its a lot to then try to skimp and mark up if you want quality service is tough.


    Hope this is helpful! Contract would set the rules I guess though.

    2Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Ahmed Omran:

    Hi Joe,

    This is normal, but we would only charge our owners 82% percent of the cleaning costs in your situation. We help manage Airbnbs for owners like you and found a way to avoid taking a percentage from the cleaning fee by adding our cleaners as Co-hosts with calendar access only. This way, the cleaning fee gets sent directly to the cleaners, and now we only get our percentage of the nightly rate instead of going back and forth with the owners collecting cleaning fees.

    I own and manage a few short-term rentals in Indian Rocks Beach, Largo, and Seminole. If you need any advice or help with your rentals, just let me know: I would love to help

    Thanks


     Thank you for the feedback Ahmed! I will be in touch once, would love to learn more about your current rentals within your portfolio.

    1Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Joe Kern:

    Hello All - just finished setting up and putting my first short term rental live on Airbnb. I just rented out most of the previous month , and agreed to pay the property manager 18% of the booking fee host payout so net of any guest service fees or occupancy taxes airbnb takes.  Now - I just noticed they are taking 18% of that (total payout)  which is inclusive of cleaning fee + nightly room fee (which is fine). But  They are also taking the full cleaning fee as well separately …is this normal practice? I feel like now the effective rate is much higher than 18% (closer to 30% +)  we agreed on… since they are taking 18% of the net total AND the cleaning fee sum. Any guidance would be helpful thanks! 


    Thanks all for the responses, i believe the misunderstanding is possibly on my end. I used to manage my own STR on Airbnb hence, I kept a majority of the payout. Now that I have a property manager, I heard the %18 and believed that to be the total expense without realizing the additional (cleaning fee, lawn care, state taxes, pool care), etc...so the effective rate is much larger and my net take home much less than I anticipated. It goes to show the value of effective underwriting upfront!

    Thanks all,

    JK

    0Reply
  • KiKi ChaseBusiness Member
    Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
    2y

    We manage 60+ rentals in Indy. We charge around 18% for our services, and that is off of the gross revenue. We take the cleaning team fees and pay them directly to our cleaning team. We also have a ~$100/month tech fee that builds in all of the subscriptions we use for each property (Ring cameras, Minut sensors, Price Labs, etc.). I feel that what your property manager is asking is pretty fair, and a standard practice!

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  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Tim Baldwin:

    18-22% management fee is common in Florida for vacation rentals. What I question is the cleaning cost bringing your cost to 30% of the rental income...?


     Hey Tim - sorry for the delayed response! Yes - cleaning cost + lawn care +pool care + county taxes all coming out of the host payout in addition to the 18% PM fee.. so quite expensive before I see any net payout

    1Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @KiKi Chase:

    We manage 60+ rentals in Indy. We charge around 18% for our services, and that is off of the gross revenue. We take the cleaning team fees and pay them directly to our cleaning team. We also have a ~$100/month tech fee that builds in all of the subscriptions we use for each property (Ring cameras, Minut sensors, Price Labs, etc.). I feel that what your property manager is asking is pretty fair, and a standard practice!

    Thanks Kiki for confirming! that is my sentiment currently as well, just wanted to ask others in the forums! Much Appreciated! 
    1Reply
  • Joe KernPro Member
    OP
    NYC · Member since 2018 · 39 posts · 16 votes
    2y
    Quote from @Joe Kern:
    Quote from @KiKi Chase:

    We manage 60+ rentals in Indy. We charge around 18% for our services, and that is off of the gross revenue. We take the cleaning team fees and pay them directly to our cleaning team. We also have a ~$100/month tech fee that builds in all of the subscriptions we use for each property (Ring cameras, Minut sensors, Price Labs, etc.). I feel that what your property manager is asking is pretty fair, and a standard practice!

    Thanks Kiki for confirming! that is my sentiment currently as well, just wanted to ask others in the forums! Much Appreciated! 

     congrats on the 60+ properties that is quite the portfolio!

    1Reply
  • Joseph McCrillis
    Member since 2019 · 41 posts · 15 votes
    2y

    Joe, If I am understanding you correctly, this is a misunderstanding of how the airbnb payout works. 

    When you get a property manager or Co-Host and they are paid out through the Airbnb platform, you will have to choose within the Airbnb platform to pay the PM/CoHost 1 of 4 different ways. 

    Cleaning fee only 

    Percentage only

    Percentage plus cleaning fee

    Set amount 

    If you selected “percentage plus cleaning fee” your payout would look like this…

    let’s say you rent the home for 1 night at $100 and you have set a cleaning fee of $75. 

    Airbnb would take 3% of the $175 leaving you with $169.75

    Then the cleaning fee of $75 would come out and be paid to your PM to pay the cleaners with. 

    That leaves your reservation payout with a balance of $94.75. 

    Then airbnb pays you out $77.70 And your PM $17.05

    So your PM collected $92.05 ($17.05 plus the $75), but should only be left with $17.05 after paying the cleaners. The PM would not be clearing $92.05. 

    Everything I described is if this is all happening from within the airbnb platform. If your profile is not on the listing and the pm owns the listing, then my response is useless lol

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    • Joe KernPro Member
      OP
      NYC · Member since 2018 · 39 posts · 16 votes
      1y

      @Joseph McCrillis great response , makes sense and as you stated the profile /listing is owned by the PM. So I don't have visibility into how the payout was configured. All I can see is the gross income, expenses and that the 18% is being taken from the gross payout (which includes the cleaning fees).

      0Reply
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