Airbnb Rentals Vacation Rental Management Fees: Are They Worth It? by Alex Karani February 25, 2020February 15, 2020 by Alex Karani February 25, 2020February 15, 2020 When it comes to managing vacation rentals, you can either do it yourself or hire professional property management. If you decide to hire the right vacation rental management company, you will save a significant amount of time, avoid management stress, and benefit from the experience and expertise of the property manager. However, they won’t offer their services for free. One of the biggest decisions you’ll need to make when investing in vacation rental properties is whether you should pay for Airbnb property management. So, are vacation rental management fees really worth it? Read on to find out. Understanding Vacation Rental Management Fees As a vacation rental investor, the best way to know if vacation rental property management fees are worth it is to understand how they are calculated and how they will affect your profits. Vacation rental property companies usually charge a percentage of the revenue the vacation property generates. The vacation rental property management rates can range from as low as 10 percent of the rental income to as high as 30 percent. But how much should you pay for vacation rental property management services? To understand this, you should know what influences property management fees. Vacation rental management fees vary based on factors such as location, investment property size, property condition, number of units in each property, number of rental homes managed, and the services offered. How location affects vacation rental management fees What your vacation rental management company charges will depend primarily on where your investment property is located. For instance, the average cost of vacation rental management fees is typically higher in a mountain market than in a beach market. This is usually because vacation homes in mountainous regions require more maintenance and tend to be further away from where services are located. If the property management company is not using local services, their vacation rental management fees are likely to be higher. The high competition in beach and urban markets also helps to keep prices low. Related: Buying a Vacation Rental Property: How to Choose the Right Location How the level of service affects vacation rental management fees Vacation rental management fees also vary based on the property management services included in the commission. While low vacation rental management fees may be alluring, they may not guarantee higher net revenue. Some vacation rental management companies may advertise a low rate but later tack on extra fees. You may end up paying significantly more money to cover additional costs for services not included in the initial fee. This makes it difficult to do an accurate comparison of vacation rental management fees and estimate your rental revenue. To protect yourself from additional costs, make sure you ask for a complete list of the services provided by vacation rental management companies before you do your comparison. Don’t sign up before you go over the specific costs. If you can manage some things on your own, you can reduce the costs. For instance, a vacation rental management company can manage marketing and bookings as you handle the rest of the management duties like cleaning and maintenance. And not all services will have a significant impact on the quality of services your guests are getting. Therefore, higher vacation rental management fees are not always worth the cost. As you hunt for a vacation rental management company, find out what exactly you are paying for and whether it is necessary. This way, you will avoid paying for services that don’t maximize your revenue. When Are Vacation Rental Management Fees Worth It? When there’s value for money Vacation rental management fees vary widely due to several reasons. However, when considering whether to hire a property manager, the main things to look at are the services being offered and how those services contribute to your net revenue. Make sure you choose a property management company that offers value for money. Compare the total costs of hiring a vacation rental management company against the potential income. Some property managers can even help you earn more money than you would through self-management. Also, remember that making money with vacation rental properties depends on the investment property you buy. Before buying a vacation rental property, it’s important that you understand how the vacation rental management fees will affect your rental income. Factor in the average vacation rental management fees in the area when calculating the potential cash flow of a vacation rental. The best way to find a positive cash flow rental property is to use Mashvisor. With Mashvisor’s tools, you can quickly and easily calculate cash flow for investment properties for sale in the U.S. housing market during your property search. Sign Up for Mashvisor Related: Four Things to Consider Before Purchasing an Airbnb Investment Property Return on investment aside, you can also consider paying vacation rental management fees in the following situations: When you are unavailable If you live out of state or have a full-time job, you may not get enough time to handle the day-to-day duties associated with owning a vacation rental property. Therefore, you may need to hire a full-service vacation rental manager to take care of your vacation home. When you want peace of mind Investing in vacation rental properties may seem simple on the surface but there’s a lot of work that goes into managing them. You have to find guests, manage bookings, handle turnovers, maintain the investment property, clean the property, etc. If you want to be completely hands-off, the peace of mind that comes with hiring an all-service property manager may be worth every penny. When you own multiple vacation homes Due to the management needs of vacation homes, it may be hard to manage several investment properties on your own. If you own many vacation rentals, you will probably need professional property management to help maximize your profits. It can save you a ton of money and time. When you have no property management expertise If you have little knowledge of how to manage your real estate investment, hiring a property manager can help you avoid costly mistakes that can reduce your revenue. When you are unable to work Perhaps your health does not allow you to handle property management duties. Related: When Hiring Professional Property Management Is a Must Self-Management Running a vacation rental business comes with unique challenges. The best reason for self-management is to avoid vacation rental management fees and keep all of your profits. If you choose to manage your Airbnb rental yourself, you will save money and have greater control over your investment property. However, you must be prepared to handle the responsibilities that come with running a vacation rental business. This can be stressful and time-consuming. You will also miss out on the expertise and useful contacts of experienced vacation rental managers. If you want to maximize your return on investment and can handle all aspects of your short-term rental on your own, vacation rental property management fees may not be worth it. However, you should also look at how much of your profits will go into paying vacation rental management fees compared to the value the company brings. Sometimes hiring a property manager may lead to more profits due to their expertise, experience, and resources. The Bottom Line There are many reasons to consider hiring a vacation rental property management company. However, knowing whether vacation rental management fees are worth it will depend on the return on investment and your specific situation. Before you hire professional property management, you should be confident that it is going to pay off. When choosing a vacation rental management company, you should consider more than just costs. Examine the history, experience, and commitment of the company. Compare and interview different vacation rental managers before making a decision. Start Your Investment Property Search! START FREE TRIAL CostsLocationRental ManagementVacation Rental 0 FacebookTwitterGoogle +PinterestLinkedin Alex Karani Alex is an entrepreneur and an experienced content writer focused on personal finance, business, and investing. For over six years, he has contributed to a number of publications, both online and print. When he's not writing or working, Alex enjoys reading, traveling, and the outdoors. Previous Post What Is a Hold Harmless Agreement in Real Estate? Next Post Cincinnati Real Estate Market 2020: 5 Trends Related Posts Is Airbnb Orlando a Good Real Estate Investing Market in 2018? Atlanta Real Estate 2018: Why and Where to Invest 10 Steps To Setting The Right Airbnb Pricing Strategy Airbnb Denver: Is It Worth Investing in 2022? How to Increase Your Airbnb Passive Income The Real Estate Investor’s Guide to Airbnb Tax Deductions 8 Steps to Finding an Airbnb Investment Property How to Start an Airbnb Business in 2020 What You Need to Know About Airbnb Arbitrage NYC in 2022 How to Earn Positive Cash Flow with the Airbnb Strategy A Successful Airbnb Business Starts with the Right Property The Complete Guide to Finding the Perfect Airbnb Investment Property in 2022 Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.