As a vacation rental owner, you want to earn more revenue, but you may not want to do all the work involved in bringing that revenue.
Hiring a professional airbnb manager is basically buying your time back. When shopping around different airbnb management companies to see what their fees are, the biggest mistake is to shop by price.
Sure, it’s important to know how much do airbnb property management companies take, but it’s just as important (if not more important) to know how much more you can earn by hiring a professional airbnb manager…
Good property managers will charge what they are worth… you will have then have to decide if you want someone to manage the property for you or if you are willing to learn how to manage your airbnb by putting together a team (more on this later)…
If you hop on an Airbnb hosting community and ask what management fees they are paying you’ll probably get a range between 10-30%…
If you just look at the percentage charged, you’d be tempted to hire the property manager with the lowest price thinking “why pay 30% commission when others do it for 10%??”
… but the thing to understand is that someone charging 30% may be doing more than someone charging 10%… and just as important to know is that just because someone is charging 30% it doesn’t mean they are doing everything they should be doing to be worth that much…
If you are looking for a marketing company that can help you free up time, then 10% may be just the right fit…
If you are looking for more hands off, then you can look for full service property managers. Just remember that just because they charge more, it doesn’t mean they are worth it.
To answer this question without bias, the best way is to break down the commission into tiers of service you should expect… this tier is just how I would classify other property managers if I were to hire one…
What to expect from low tier 10% Airbnb Property Management Fees
If you want a bare bones approach, there are companies out there who do marketing and guest communications. You can think of this service as a remote manager.
If you are looking to start a vacation rental management business, this is the easiest way to get started, with the basics…
Some people think that they are hiring a full service property manager for 10% management fees but that’s not always the case. No property manager would do all that work for so little… managing vacation rentals is a complex and time consuming business…
I have seen people be happy with this level of service where they do the basics like help market your listing, handle inquiries, and more…
Some of these companies do offer more services so don’t go by the reviews alone, but do make sure your expectations match the management fee you are willing to pay…
If you are looking for someone to help manage your airbnb remotely, this lower tier 10-20% is probably a fair vacation rental management fee…
If you expect more from a property manager, then you are looking at the mid tier level of service.
What to expect from a mid tier 20% Airbnb property management fee
If a property management company is charging anywhere around 20% (15%-25%), then you should expect to have “boots on the ground”…
When you have boots on the ground you can get extra help with the initial set up your Airbnb, and maintaining your Airbnb.
A good local property manager can do walkthroughs and help you with property upkeep – filters, pest control, lawn care, etc.
They are also able to help guests better when they have questions regarding the local area (i.e. what’s a good place for an anniversary dinner?) that a remote airbnb manager may not have the best answer…
Other services usually offered by mid tier short term rental property managers will often include end of month reporting, handling accounting and sales tax remittance, etc.
Again, there may be some management companies out there charging 25-30%, who may not be doing that good of a job… they should probably be charging sub 20%…
In other words, I’m not saying that just because a company charges over 20% management fees that they are top tier… what makes Airbnb property management companies top tier is the level of service they provide not so much their fee… which then again, if they provide this level of service and can earn your vacation rental more money, then their fee is worth it…
What to expect from top tier 20%+ Airbnb property management fees
I think anyone charging over 20% should be doing what I call “top tier vacation rental management service…”
The best way I can describe whether a property manager is top tier and worth it comes down to quality of their work AND their ability to help your Airbnb earn more… these are 4 things we’ve noticed from the best vacation rental managers…
#1 Good communication
The best management companies will go above and beyond and have great communication… Our property management team has people dedicated just to communicating with our vacation rental owners…
How you do one thing is how you do everything.
If you don’t have good communication with your property manager it makes you wonder what their communication with guests is like.
When you have good communication, owners can then see first hand that their guests are also being well taken care of because we have a team dedicated to creating a 5 star guest experience… not just with good communication but by ensuring that the homes are immaculately clean and have all the amenities needed to provide a good guest experience.
Communication is also key when it comes to working with our cleaning (and maintenance) team…
I don’t know how to put a price on this, but this is why I believe good communication is what separates professional managers from those still learning…
#2 Can increase booking revenue
Some people think that getting more bookings will make their Airbnb more money, but that’s not always the case…
If you lower your nightly rates you may attract low quality guests. More guests also equals more turnovers (more cleaning fees, booking fees, etc.), and that can put more wear and tear on your property…
A good property manager will analyze the vacation rental market and put in place a dynamic pricing strategy to maximize booking revenue.
We have found listings that got bookings for $256/night on average, and missed out on higher rates because they weren’t aware of events going on that drove up demand. We were able to book our listings for closer to $450/night (almost double) just by having a dynamic pricing strategy in place.
That’s why, you have to look at how much more can you earn by hiring a top tier airbnb manager. We have an entire team dedicated to revenue management that ensures listings are maximizing booking revenue.
#3 Can free up your time
The last thing you want when hiring a short term rental management company is to have to manage the company…
This is possibly the hardest thing to judge, but it’s possibly the biggest compliment we get…
We had a vacation rental owner come onboard with our team and we were on a Zoom call going over their listing as we’re getting ready to launch and they said “this is the first time I’ve worked with a company where I feel like I can walk away for a month and not have to worry about my property”…
… and that’s really the feeling we strive for when working with vacation rental owners. We hope that our communication gives you the peace of mind knowing that your property is earning more, is well taken care of and that we’re actively attracting high quality guests and creating 5 star guest experiences with our extra little touches so that you can walk away from it and enjoy life…
#4 Premium guest experience
One reason why we are able to make more from our Airbnb listings is because we offer more value. Many hosts will simply put their listing up on Airbnb and they are happy just earning booking revenue.
We are constantly looking for ways to stand out and go above and beyond by offering things like private chef experiences, wine tasting and other offers depending on the property and location…
This is why every property we look at is different and the fee we look at depends on how much more we can earn the property by plugging it into a working system…
If hiring a good property manager seems like paying too much, then I highly recommend you check out STR profit academy to learn how to set up systems to make more from your STR and learn how to manage your airbnb remotely and free up your time…
I hope this helps you find out how much to pay in management fees… If I did a good job then your decision won’t be based just on how much you pay, but how much more can you earn and the peace of mind of leaving your property in good hands…
