Vacation Rental Guide / What is Vacation Rental Property Management? / Breakdown of Property management fees for Vacation Rentals

Property management fees for vacation rentals

Fees are charged for a number of reasons for a vacation rental. In the case of property management fees, these are fees that are charged to cover the costs of the work that the property manager does to manage the property.

Learn how to calculate property management fees so that you understand how the management is being charged on a property that you own.

The different Property management fee structure models

While the industry average is anywhere from 25 to 30% of the rental cost, the fees that are charged by the vacation property management companies vary. They vary based on the location of the property and the company themselves. The can go anywhere from 10% all the way up to 50%.

The type of property also depends on the fee and the amount of work that you would like them to do. While this is just an idea, all fees should be negotiated with the company prior to working with them.

The different types of vacation rental property managers know what fees work with them. Knowing how much do property management companies charge for vacation rentals is a good thing and it gives you a heads up when hiring one.

Initial fees

Much like having to put money down when you sign up for something, there are initial fees that come with working with property managers. These fees are general fees to get started which cover everything from marketing and advertising to paperwork setting the properties up as clients.

This can go for free, up to $300 but gets you started with your vacation rental business.

Management fees

Management fees that are charged to provide the manager with coverage for any cleaning, maintaining and advertising fees over the life of managing the property. These fees will ensure that the property continues to be taken care of by the company.

This fee can be anything from 12 to 50% or more of the average monthly rental revenue. A good management company is going to come with a premium cost, but many owners find that this is worth it if they can continue to rent the property to vacation rental guests and maintain it, while owners take clear profits from the top.

Flat-fee pricing structure

Some property management companies prefer to work on a flat-fee pricing structure which gives only one price for the management of the property throughout the year. The price is agreed upon by both parties depending on what they feel is the best solution.

Additionally, the flat fee has a lot to do with the type of property and where it is located. The vacation rental property management rates on a flat fee are often based off of the rent prices and what fair market value is.

Average vacation rental Property management fee calculation

In order to effectively do a property management fee calculation, you’ll have to consider a number of factors:

  • The kind of property management fees they’re offering: flat fees, percentage-based, etc
  • The fee model they work with: whether they use commission or guarantee models
  • Extra fees: like cleaning, maintenance, and advertising fees

If you’re still not sure how to calculate your property management fees, you can try using Landlord.net’s property management fee calculator here.

We recommend making sure you know what you’ll be paying for before working with a property manager. However, most professional vacation rental property managers will provide you with a list of all the fees and be able to explain the importance of each one.