How Much Do Vacation Rental Property Managers Charge in Fees?

Vacation rental property managers charge about 35% of revenue as their fees for managing your property.

Yes, you read that right. Some may charge a little bit more or less, but 35% is a good rule of thumb. If you give away 35% of your revenue right of that bat, I can tell you there is no way you’re going to turn a profit on a vacation rental. Whats more is your property manager is getting a risk fee 35% commission without having fronted any of the capital for the purchase or bearing any risk.

Historically, second-home owners have used property managers to rent out and manage their vacation homes. After all, before the internet (or sites like Airbnb or Vrbo), how was the average homeowner supposed to get any customers for their rental? A property manager would do the hard work of building up a customer demand and make sure your place actually was rented. Now anyone can post a listing on Airbnb or Vrbo or Booking.com and get bookings. You don’t need a property manager to get customers, so there’s really no need to continue to pay such exorbitant customer acquisition fees unless you don’t want to deal with managing an Airbnb account.

The other thing property managers do (that’s still valuable) is actually manage your property. Make sure the cleaners come, that property maintenance takes place, and respond to issues that arise with guests that requires a personal presence. You may be able to find someone who can do that at substantially less than a 35% commission.

Increasingly, lots of homeowners self manage their vacation rental using the listing sites for demands and a network of contractors and local property managers that are compensated based on their time, not based on the revenues. That’s what we do and why we can turn a profit. In a future post, I’ll lay out the playbook for self-managing your vacation rental.