Vacation Rental

Vacation Rental Property Management Fees: What to Expect

By July 6, 2018 No Comments

If you have an investment property or don’t live in your home year-round, it only makes sense to rent it out. A property manager provides a convenient service that lets you enjoy the benefit of additional income without dealing with bookings and operational details, including cleaning and maintenance.

Things to consider before engaging a property management company include the type of contract you sign, the level of service you need and the property’s location.

Type of Contract

There are two types of pricing structures: flat fee and commission rate. The fee you pay depends on whether you rent the property all year or require short-term bookings by vacation renters.

Flat Fee or Commission Rate

Expect to pay your property management company 8 to 12 percent of long-term monthly rentals, not including expenses. For example, if you get $2,000 a month for a rental, the property manager might charge as little as $200 per month.

If there’s a constant turnover or the manager has to continuously book new renters, the fees would likely be much higher. In this case, a commission based on the total rent collected might make better sense.

Property Management Fee

Most management companies offer concierge services that include booking guests, cleaning, guest accommodations and emergency maintenance. For this service, they charge a percentage of the income generated by your vacation property. Here are some high-level estimates on what you’ll pay:

Typical range. The typical range you can expect to pay for vacation rental property management falls between 15 and 40 percent.

Average range. The average property management fee in the US is 28 percent.

Level of Service

Vacation rental property management companies charge fees based on the level of service provided. So, if there are some things you plan to manage on your own, such as cleaning and checking in guests, you can save money. If you aren’t local, that’s impossible, so you have to delegate to a property manager.

Cleaning Fees

Many short-term rental management fees should be passed on to renters. Before new guests arrive, a manager arranges for cleaning services. For apartments and condos, this should be around $100, but larger properties cost double that or more. For example, a five-bedroom estate in the Hamptons will cost several hundred dollars to clean.

Additional Fees

You might be surprised that there are additional fees for short-term rental management. However, they are a necessary part of keeping up a space you expect to get top dollar for.

Booking Fees. Depending on the contract, if your property manager books rentals for you, they may charge a higher percentage. If you have the time to set up and use Airbnb, VRBO or HomeAway to get your own leads, you can save a lot of money.

Credit card processing. Fees for bookings can cost 2 to 3 percent, depending on the company. Find out if your manager charges separately for this.

Maintenance. This could include anything from landscaping to electrical and plumbing repairs and has to be factored into your property management budget.

Deep cleaning. Most companies recommend and arrange for annual deep cleaning. This is especially important if you have carpets or other features that require periodic attention, such as crystal chandeliers or a pool.

Regional Factors

Where your property is located affects what your property management company charges. For example, beach rentals are typically more expensive to maintain due to their prime location; remote mountain cabins can be difficult to reach, so it costs more to get maintenance and cleaning services there.

Urban Rentals

Vacation rentals in large cities are low, around 20 to 25 percent, because they require less maintenance than a beach or mountain home. Therefore, property management companies charge less.

Beach Rentals

If you own beach rental property, your management fee will likely range from 25 to 30 percent. Beach rentals have lower rates because management companies tend to concentrate there and are often less than a mile away.

There’s also more competition in established vacation spots, like Virginia Beach, to keep costs low.

Mountain Rentals

In mountain markets, such as the ski markets in Colorado and Lake Tahoe, fees range from 30 to 35 percent. The fees for mountain or ski markets are higher because they’re more spread out and need more maintenance.

In-house Management

In-house property managers in condos or high rises charge up to 40 percent. Be wary of investing in a property that seems to be taking advantage of your need for local property management.

Final Word

Vacation rental property management fees aren’t the only factor in deciding who to hire. Trust, communication and performance determine how comfortable you are in hiring them to manage your property.

Find a good company with a track record of competent management, even if you have to give up a little more money. You need a property manager you trust to maintain and book the property, because an empty condo or house costs you a lot more.


Kris Lamey is a real estate agent and investor in South Florida who specializes in purchases of distressed property for resale.