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
1d

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
    1d

    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 · 7 posts · 2 votes
    22h

    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
      22h

      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
    19h

    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
    15h

    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
      9h

      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
    13h

    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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  • Hossein Sharifi
    Investor · Member since 2023 · 86 posts · 39 votes
    7h

    @Jay Hinrichs on the co-host question: it's not arbitrage. The listing stays in your name and a local person handles guest messages, pricing and turnovers, usually for 10–20% instead of 25%. Airbnb has a co-host directory in the host dashboard, and a lot of good local cleaners co-host too.

    Since the goal is the 1031 and not income, I'd build the plan around the Rev. Proc. 2008-16 safe harbor rather than occupancy. For each of the two 12-month periods after the exchange, rent it at fair market rent for at least 14 days, and keep your personal use to the greater of 14 days or 10% of the days rented. Keep the calendar, payouts and any leases in one file. A couple of 30-day winter stays plus some summer weekends could get you there with a lot less wear than chasing nightly bookings. Worth confirming with your QI.

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    7h

    25% is a little high nowadays in most markets. I still see over 20% in more remote/rural areas but in popular areas 20% is the norm. You can find lower but beware, its hard to run any business, especially a PM business on sub 20% gross margins. You are more or less spot on otherwise. If you sell a night on Airbnb for $100, the PM will receive $84.5. At 20% they take $16.90 leaving you with $67.90. We (as a PM) have cleaning fee's set up, but airbnb is no longer showing them in favor of "all in pricing". Our owner's see the gross nightly rate, which is $100 in this scenario, and our owner would receive $67.90. From that $67.90 you still have to pay for PITI, utilities, maintenance, and costs of doing business i.e. linen replacements, kitchenware replacements, etc.

    STR's are not get rich quick schemes any more (like during COVID). Yes properties can (and should cash flow) but you likely will not be quitting your day job. Especially if hiring a PM cashflow will be minimal likely. In 2026 the draws to owning a STR (as a new owner) would be a) Potential sizeable tax breaks b) Having a property in an area you enjoy visiting, so personal use of the property from time to time c) Assuming it is in highly desirable area, future appreciate and principal pay down.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    7h

    We tried STR and found it too time intensive.

    • Staffing dependable cleaners was a BIG challenge!

    • So was doing quick turns within 24 hours (or less) between Guests

    • Also, Guests expect hotel-like prompt maintenance, after hours & weekends, even for stuff they cause.

    We've switched to doing MTR (minimum 30-day stays), which you can post on Airbnb and VRBO, but we get most of our action from Furnished Finders.

    MTR fits better with our core LTR business.

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