Figuring out Gross reciepts and Net reciepts seems like Gross is good but net not so

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Figuring out Gross reciepts and Net reciepts seems like Gross is good but net not so

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

As I look into STR I can see what the gross nightly rents are.. Then I see that VRBO charges like 8% to be on their platform and Air bnb is 15% so then when PM want 25% your taking 33 to 40% right off the top..

And a bunch of the listings I saw dont have cleaning fee's and I suspect the cleaning fee is not included in the 25% PM fee so further erode the Net income.

do I have this right and is 25% the going rate to hire a PM for STR ?? Seems like if one can self manage and only use VRBO or other basically low cost marketing methods. you get to the same place with only 2/3rds or so utilization which should make things easier on the asset and for self management headaches.. what do others think and how do you do it. ?

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Lauren Kormylo
Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
16h

Airbnb used to charge hosts 3% and guests about 14%, but they recently changed to putting all of the service fee on hosts at 15.5%. Hosts have raised their prices to so that guests are paying about the same total as before. VRBO only charges 8% until Oct 29, then starts charging hosts 12% but they are also charging the guest too (it’s not known how much yet). So it’s going to be about the same total percentage of service fees on both platforms. Don’t just list on VRBO, you need to be on both. Most hosts here self manage because PMs take a big cut and we have the time. But if you don’t, I recommend that you get a PM. 5 star reviews are everything, and if you can’t provide great service and hospitality, bookings will suffer and you could be booted off the platforms because of their standards. There’s a lot to learn about their rules and how everything works.

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  • Lauren Kormylo
    Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
    16h

    Airbnb used to charge hosts 3% and guests about 14%, but they recently changed to putting all of the service fee on hosts at 15.5%. Hosts have raised their prices to so that guests are paying about the same total as before. VRBO only charges 8% until Oct 29, then starts charging hosts 12% but they are also charging the guest too (it’s not known how much yet). So it’s going to be about the same total percentage of service fees on both platforms. Don’t just list on VRBO, you need to be on both. Most hosts here self manage because PMs take a big cut and we have the time. But if you don’t, I recommend that you get a PM. 5 star reviews are everything, and if you can’t provide great service and hospitality, bookings will suffer and you could be booted off the platforms because of their standards. There’s a lot to learn about their rules and how everything works.

    2Reply
  • Clever Mukori
    Member since 2026 · 4 posts · 1 vote
    14h

    Ask any STR PM you're considering for a real owner statement from a comparable property. Check whether their % is charged on gross booking revenue or on revenue after platform fees and cleaning, because that alone changes the effective rate a lot. Also check who keeps cleaning-fee margin and pet fees. Then model your net from the statement lines, not the listing's nightly rate.

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    • Jay HinrichsBusiness Member
      OP
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      14h

      the listings I have seen in the area I am buying there are no cleaning fee's when you try to rent a property and it gives you a total it just says one total all fee's included ( which I have to think includes cleaning fee) and if thats the case not sure how great these are :) its not a money maker for me per se if I get enough to pay my property tax's utls and maintenance that would be fine property has no debt..

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  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    11h

    I had 2 PMs in different locations. Both in my opinion under priced despite being clear I wasn't interested in volume. These are nicely done beach properties that I don't want beat up. With PM, Airbnb/VRBO and cleaning fees one was consistently in the 35% range the other 45-50% due to the low nightly rate. The crucial piece is getting a good housekeeper. My occupancy has remained solid in the warmer climate property despite increasing the rate. The babysitting is fairly minimal although you will get the occasional guest who is high maintenance.

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    7h

    Some thoughts:

    • STR management is a lot of work.

    • Co-hosts are cheaper than PMs.

    • Good management is critical to the success of the STR. Pricing, guest interaction, coordinating repairs and cleanings and the impact on ratings.

    • I have underwritten sierra cabins with monthly revenue of over 2% of purchase price that my underwriting depicts as cash negative.

    Good luck

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    • Jay HinrichsBusiness Member
      OP
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1h

      Dan how does one go about finding a Co-host ? is that like an arbitrage situation ? this is not an money making venture for us its our future second home that has to be a rental for two years in some form or fashion for my 1031 to work. So just trying to figure out whats best.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    5h

    Jay, I think you're looking at it the right way. Gross revenue can make an STR look a lot better than the money that actually makes it to the owner.

    I wouldn't focus too much on whether 25% is “the” going rate for a PM. I'd ask exactly what that 25% covers and then add everything else on top of it, platform fees, cleaning, supplies, maintenance, utilities, insurance, taxes, and whatever else you're paying to keep the property running. I'd also put a value on your own time. Self-managing may save the management fee, but if you're spending hours dealing with guests, turnovers, pricing, and maintenance, that isn't really free.

    From the tax side, I'd keep those expenses clearly separated as well. Platform fees, management fees, cleaning, repairs, supplies, and other operating expenses can all affect the property's taxable income, but you still want to know the real cash flow before taxes rather than using the tax deduction to make a weak deal look good.

    I'd compare the property three ways:
    Self-managed -> PM-managed -> PM-managed with a lower/higher occupancy assumption
    Then see what you actually keep in each scenario.
    If self-management gets you only slightly more cash but takes a meaningful amount of your time, the PM might be worth it. If the PM takes 25% and your net income gets crushed, that's a different story.

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