Short-term rental (STR) management fees are billed for various reasons. Different STR management companies have different fee structures for vacation rentals. The fees will vary depending on the company and what they provide.
Vacation rental property management services are an incredible asset for millions of STR property owners. But with so many different companies available offering an increasing number of services at varying costs, hiring the right company can be challenging.
Short-term rental property management is the management and organization of vacation rental properties. This includes everything from managing reservations & housekeeping to marketing & listing optimization, and more.
STR management companies can vary in the type of services they offer and how they fulfill them. However, they generally offer services that help hosts effectively manage their properties and maximize their profits.
The fees associated with STR management pay for the services that STR property management companies offer. The fees help with the smooth running of everyday operations.
For example, STR management companies have to deploy constant marketing. This requires diligent experts to optimize a client’s listing and setup and maximize b. It also pays for managers who need to be on-call in case guests have questions, queries, or issues. There’s also the daily, high-quality guest screening, which helps filter potentially bad guests from the kind of guests hosts want.
Furthermore, these fees pay for the continuous cleaning and maintenance necessary. The money facilitates the employment of professional cleaning services and maintenance and repair work that keeps properties in tip-top shape so they can continue to be operational and perform to their full potential.
Fees for managing vacation rentals tend to fall into one of three categories. However, these are not always mutually exclusive.
For example, a short-term rental management company may work with a local manager who charges percentage commissions for each booking. They may also charge extra fees on top for services such as greeting guests in person or conducting local tours.
Since there can be overlap, we recommend fully checking a company’s fees and services pages.
Some STR management companies operate a flat fee pricing structure. Like traditional long-term/residential property management companies. The owner pays a fixed amount that covers the management service regardless of the property’s performance and the revenue generated.
Unlike commission-based models, where the management company takes a percentage of each booking's revenue, the flat fee remains constant, providing property owners with more predictable costs. This model can be appealing to property owners who prefer a straightforward and consistent pricing arrangement for managing their short-term rentals.
The downside is that if it’s low season and a host has 0 reservations, the property owner would still pay the management fee out of pocket.
Some STR management companies operate a simple and transparent percentage fee pricing structure. This model aligns the interests of the property owner and the management company, as the fee is directly tied to the property's rental performance. It's a common approach in the industry and provides a straightforward way for property owners to compensate management services based on their rental income.
Here’s an example of how it usually works.
Let’s assume a vacation rental has a nightly rate of $100. A guest stays for six nights. If the STR management company charges a commission of 20%, the total fee to be paid would be $120. The commission paid will usually include a set of services such as reservations, guest communication, and more.
The average percentage for these services is around ±25% (it varies from location to location). Keybee offers a 14% fee in the United States, guaranteeing top-class services at a very good and fair price.
The benefits of the percentage fee model are that it’s risk-free; if your property for any reason underperforms, you won’t have to pay out of your own pocket. The STR management company will treat your property as its own, since the more bookings, the more income for them.
Under the guaranteed income fee model, management companies pay owners an agreed sum each month. This is laid out beforehand, so the property owner knows exactly what they’ll get each month. This adds a layer of security and peace of mind.
The STR rental management company keeps excess profits as compensation, though. This is worth considering, as depending on your property and location, this could be a lot. However, many property owners feel a reliable monthly income is worth the price.
The guaranteed income model may be preferable for vacation rentals in an area with extreme seasonality fluctuations. That’s because income in these areas can fluctuate heavily and be inconsistent. The guaranteed income model adds stability and consistency.
The services included in the fees vary from company to company. Some are small businesses based locally and offer only the basics. Others are larger, working across many locations, and offer complete property management taking care of many properties at once.
Below are some of the services you can expect to find included in standard and extra vacation rental management fees.
Listing setup and optimization: Listing setup optimization and quality marketing for consistent bookings on major platforms like Airbnb, Booking, and Vrbo.
Booking coordination and organization: Consistent calendar bookings and dynamic pricing based on seasonality and other factors ensure maximal occupancy rates and income.
Check-out cleaning and maintenance: Hiring professionals for cleaning after each guest's stay between bookings and being on call for managing repairs and maintenance.
Generating positive reviews: Encouraging guests to leave positive reviews by periodically checking in, providing a template, and ensuring guests receive the service and amenities they desire.
Financial organization: Generating monthly and yearly financial statements and reports, including income and net cash flow.
The costs of managing short-term rentals vary greatly for several reasons. However, since vacation rentals often prove lucrative and because there are many factors that go into being a great host, it’s a worthwhile investment for many.
Despite the fees, annual returns for quality management can be greater than long-term rentals due to higher gross rental income. You will maximize your profits by choosing an established, professional STR management company.
Keybee is a complete vacation rental management company. At Keybee, we offer the full spectrum of quality services, such as 24/7 guest communication, listing setup and optimization, cleaning and laundry, and more. And we run on the flat fee model at a rate of just 14% of net income for complete transparency. No contracts, no commitments, no hidden fees.
Efficient 24/7 guest communication, with real people being there to answer everything to your guest and resolve all problems.
Creating a listing that stands out from the competition
Keybee handles the check-out and cleaning to ensure fast and flawless turnovers and top cleaning quality.
In-house developed channel manager that prevents double bookings when hosting on multiple platforms (Airbnb, VRBO, HomeAway, Booking.com)
