All Forum Posts by: Collin Hays

I am not as familiar with the various fees of Airbnb.  It could be that they represent a better value currently than VRBO.

The cash grab by VRBO over the last 4 years has been stunning.

Greed eventually kills.

Right now, self managers really have no choice.  VRBO and Airbnb are the Amazons in this industry.  And they are taking full advantage.  I think it’s a shame really.

We need more competition in the space.  Homeaway/VRBO deftly acquired all legit competitors and essentially foreclosed the self management side of things.

If you are going to pay someone up to 19% and self manage, why screw with self managing?  

So let’s assume you have a rental that grosses 40K a year.

Here are your VRBO expenses:

- either $599 per year flat fee or 5% rental commissions.
- 3% credit card fee

-3% advance pay fee

- Average of 8% “service fee” charged to your guests that effectively lowers your rent (you have to adjust your rent after the add on fees to keep it market competitive), and VRBO doesn’t share a dime with you.

So your fees to VRBO range from $6000 a year to $7600 per year on a $40K rental.

15 to 19 percent total. 

Extra fees and deposits chase off bookings and lower your yields substantially. Damages are rare. I've owned one STR since 2005 that is occupied 240 nights a year and have incurred $1000 damage tops in 14 years.

If you need an extra 300 bucks deposit to help you sleep at night, it could be costing you 20-30-40 times that in lost rents each year.  That adds up to a LOT of lost income over a few years over an occasional broken stool or lamp.  

Penny wise, pound foolish.

I would say 15%.  You could easily achieve 20% and more with prices two years ago, but huge interest in the Gburg area has driven up prices and forced the yields down.   

But it is still the best area in the country IMO. 

I stick by my assertion that a pool table is a big deal.  We have seen rents rise considerably before and after.  An occasional rip in the felt is worth several $ thousand a year in new revenue, although I don’t recall any such repairs in the last 10 years.

People do play on their devices, but like some element of novelty - that is why they are renting a cabin to begin with.


We had a client in the Blackbear Falls area with no game table.  We recommended a small table multicade that cost $1200.  The annual rents went up from $5-7K depending on the year, and that was 4 years ago.

So another $20-25K in rents for a $1200 purchase.  That is real money.

Many states have specific laws for property management companies.  Many, you have to be licensed to operate in.

In the state TN where my company is, you have to have three banks accounts:

1.  Escrow account.  All payments from guests flow into this and may not be disbursed until the guest has departed.

2.  Operations account.  This account pays for all property related expenses - repairs, pest control, etc.  All of these expenses are homeowner expenses.

3.  Management account.  All expenses that are administrative.  Advertising, housekeeping, wages, etc.

When payments to homeowners are disbursed each month, they are net of  expenses that the management company incurred on their behalf during the previous month.

Additionally, there are about, oh a dozen or two, other ways that unscrupulous management companies are hosing homeowners.

I don't want to whitewash the entire industry.  A good management company that charges a reasonable fee will (in my humble opinion) usually outperform self management situations by a wide margin.  You pay them a reasonable fee and let them screw with all of the headaches.

Rent shifting is the practice of management companies of shifting revenues away from rents - which they have to share - to various junk fees - that they do not.  I consider it borderline fraudulent, but most of doing it.  The practice decimates the homeowner's net return. 

I actually produced a video on YouTube this very week of the practice.  I can't give you a link to it because I mention my own company at the end, but if you go to YouTube and search for "vacation rental companies exposed", it should be the first one you see, since it is entitled that.  

There is a LOT of crookedness in this business, and being in the business myself, it is embarrassing.  I am a big believer in transparency.  There is enough money to go around if everyone will just do business the right way.

The entire "Advance Pay" situation with HA/VRBO is nothing but a cash grab.  They are charging an outrageous 3% credit card fee to begin with, and then another 3% if you want your funds "in advance".  ALL payments are in advance on vacation rentals.  VRBO is collecting it; they just aren't passing it on to you unless you pay them another 3 points.

We ditched the whole HA/VRBO credit card system for our properties and went with our own processor.  You have to "integrate" with HA/VRBO to do that and you have to have at least 10 properties.  But our CC fees are now around 2.1%, which saves us huge dollars, and we are getting are funds WHEN THEY ARE PAID BY THE GUEST, which is the way it's supposed to be.