How Much Does It Cost to Have Someone Manage Our Airbnb?

You’ve checked your local city ordinances, co-bought a property with friends, furnished it, created an appealing listing, and paid for high-resolution photography. The hard work is over, right? Not so fast. The work is only beginning but how you choose to manage it is up to you.

Managing a vacation rental isn’t easy. It includes marketing the property, cleaning, restocking household goods, communicating with guests, managing reservations, and likely fielding those inevitable emergencies in the wee hours. These factors lead to many property owners weighing an important decision: would my friends and I rather manage all these details by ourselves, or would we prefer to pay someone else to do it

When you first start, there can be benefits to owning all aspects of property management. You’ll quickly learn what is working, what is not, and what is taking too much time. It will also help determine what you’re willing and able to do versus what you’d rather outsource.

Outsourcing property management

How efficiently you manage your property is crucial to your profitability—and likely your sanity too. Many co-buyers choose to outsource property management services to a third-party company. The inevitable question that arises is how much it costs to have someone manage your Airbnb.

Pricing Options

When exploring Airbnb management companies, you’ll quickly find there are two pricing options for property management companies: a commission-based pricing structure and a flat-rate pricing structure.

Commission-based structures mean companies take a percentage of your Airbnb earnings each month. You may find companies who try to charge much higher or charge set-up fees on top of their monthly management fees, so be sure to ask what is included in their fees.

Flat-fee structures mean no matter how many bookings you get per month, you’ll pay the same monthly rate to the management company.

Property Management Fees: What to Expect

Deciding between a flat-rate and commission rate can be difficult, and there is no one-size-fits-all answer to how much it costs. While the industry average ranges anywhere from 15% to 40% of your revenue, the average property management fee is 28% in the United States. However, the fees charged by Airbnb property management companies vary. Determinant factors include location of the property and the company itself, as well as the level of service and quality you seek.

While this will provide you with a ballpark idea of Airbnb property management costs, all fees should be negotiated with the company before working with them.

Services Provided by an Airbnb Property Manager

With some Airbnb property management companies charging upwards of 40% of your rental revenue, the services the company provides should ensure a five-star guest experiences and high occupancy rates.

Some of the common services provided by Airbnb property managers include:

• Setting the right rental rates – they’ll perform market research to determine what similar properties are priced at to make sure you’re priced competitively while maximizing high occupancy.
• Marketing your property – they’ll maintain your listing on Airbnb
• Ensuring high-quality guests – the company will check the guest’s prior ratings and reviews to verify they’re reputable and respectful
• Managing maintenance and repairs – they’ll make sure your property is in tip-top shape, which is critical to maintaining five-star reviews
• Handling cleaning – you’ll likely have tight windows between guests, but your property manager will meet the challenge of finding, scheduling and paying Airbnb cleaners
• Knowledge of local Airbnb laws – Airbnb rules and regulations vary by jurisdiction. A property manager should have a solid understanding of the local short-term rental regulations to help you reduce the risk of incurring penalties and fines
• Guest relations – from welcome notes to thank you notes, good communication sets the stage for a positive guest experience. Airbnb property management companies will emphasize clear and prompt communication

It’s one thing to co-buy an Airbnb rental property, and it’s another thing to make sure it’s managed well. Whether you choose to self-manage or outsource the responsibility to a property management company, the decision begins by demystifying short-term rental management fees to help you make the most informed decision about your vacation home.

Nestment, Inc. does not guarantee and is in no way responsible for the accuracy of information provided in this blog post. All information is provided “AS IS” and with all faults. Data presented here may not reflect all real estate activity in the market.  While the information on this site is about legal and tax issues, it is not intended as legal or tax advice or as a substitute for the particularized advice of your own attorney and tax professional.