How Much Do Vacation Rental Property Managers Charge?

A vacation property is a good investment and a steady rental income stream. Rental property management is the supervision and administration of vacation rental property and investment real estate by a company other than the owner.

Property management companies provide numerous services that help residential and multi-family property owners run their businesses. Property management duties range from handling bookings, cleaning, and maintenance. Helpful responsibilities include welcoming new tenants or collecting deposits and rental income. A property management company can even collect late fees or start eviction procedures when necessary.

The overall cost of property management services ranges from 25% to 30% of the rental price. The fees charged by the vacation rental property management companies vary by property type, size of the property, and type of tenant.

The property’s location is also an essential factor when determining management fees. Management companies frequently look at expected tenant turn-a-round or length of rental stay as a factor in calculating costs.

Finally, a full-time management company may charge a higher than average price than a per-service or part-time company. Prices vary depending on whether the company is local, a real estate agent, or a national property management firm.

A rental management company is suitable for high-volume real estate investing or out-of-town property owners. It can increase the number of bookings, thus rental income, through more individualized property care.

Being able to answer the question of how much do property managers charge to oversee vacation rentals provides a good starting point for fee negotiation.

Initial contract and setup fees

Initial setup fees, much like deposits, are one-time fees covering everything from monthly paperwork, property inspection, and review, a marketing or advertising fee for prospective tenants, to preparation of the property management contracts.

Contracts are vital when arranging property management services and negotiating how much do property managers charge for the agreed-upon services.

A property management services agreement is a legally binding document between the parties defining the scope of work to be performed by the manager, the management company, or online booking services.

When you sign a property management agreement, you want to make sure that you have some extras put into it to cover everyone. These may include the expected responsibilities of both the owner and the manager, the length of the agreement between the parties, the fees and payments being paid by the owner and to the manager, equal opportunity housing, or other required legal information. Finally, describe the situations under which the agreement may be legally broken, also known as a termination clause, without fault or financial responsibility.

Initial contract and set up fees range from free to $300.

Ongoing property management fees

Property managers operate and oversee all aspects of their contract vacation units to ensure that they maximize the property owner’s income potential. Professional property management fees for the investment property usually include daily cleaning and routine maintenance costs before and after each new tenant.

Typical property management is usually a monthly management fee structure that ranges from 12% to 50% of the average monthly rental revenue. A good management company comes at a premium cost but ensures the value of a vacation investment property.

Ongoing property management may include face-to-face rent collection due to long-term rentals.

Flat-fee pricing

Some good property management firms prefer to work on a flat-fee pricing structure. These can be charged to the property owners monthly or annually. Typical fees include maintenance fees, eviction fees, or vacancy fees to care for and maintain vacant units.

Flat rate commercial property management rates often reflect the fair market value of collected rent and fees. Additionally, the flat-fee structure provides consistency of cost for the vacation real estate investor, allowing for an off-season when monthly rents are down.

Vacation rental management

Vacation property management services are the supervision and administration of vacation rental properties. Property management companies charge for all arranged duties, including tenant screening, tenant placement fees, bookings, lease renewal fees, general cleaning and maintenance, marketing, and providing a positive guest experience.

Benefits of Property Management Companies

The benefits to hiring a professional property management service are numerous, including designating a single contact point for all tenants and guests to answer questions or deal with minor complaints and quickly and efficiently resolve maintenance issues. These firms also ensure a steady flow of income by requiring the management service to fill the vacant units.

Commercial online management

While many property owners use realtors, there is a growing use of online booking services such as Zillow or VRBO. All online services charge fees to property renters and single-family home investors and are typically 8% per booking – 5% VRBO manager fee and a 3% VRBO payment fee.

Most AIRBNB hosts pay a 3% flat service fee for the money collected per stay.

A booking subtotal is a deposit or deductible, nightly rental price plus a mandatory cleaning fee, as well as an additional guest fee, if applicable. AIRBNB fees and taxes are extra. Guests typically pay a 14% service fee at the time of the booking.

AIRBNB management services cost 20% of the rate per night. Additionally, fixed fees are added to each reservation to cover the logistical costs. These additional fees are usually the guests’ responsibility and may include mark-ups for supplied services, early termination fees, late payment fees, or inspection fees.

These booking services offer convenience and upfront collection of deposits. They also provide specific move-in dates for short and long-term rentals. However, the actual cleaning and maintenance and inspection of the residential property are still the owner’s responsibility.

When using a booking service, a property owner still has many options to maintain their investment. One of the services available is vacation rental cleaning services, and many maid services offer vacation rental cleaning for a set fee.

Another convenient service option is a final setup service. These services add groceries, flowers, and the finishing touches that create a positive guest experience. These companies are often small local businesses, and costs may be included in the nightly rental or added for a reasonable service fee.

Whether local or national in size, property management firms provide a range of valuable services that help residential and multi-family property owners run their businesses.

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