How Much Do Property Managers Charge?

Thinking about hiring a property manager, but are not sure whether it’s worth the cost? Should you pay someone to take care of the ins and outs of managing an Airbnb rental property for you, or is it better to DIY and keep the money?

There’s no right or wrong answer to this question. Ultimately, it all depends on your budget and the value of your time. So, how much do property managers charge for their work? And what do they do for property owners? Read on to find out if hiring a property manager is right for your STR property.

How Much Does Property Management Cost?

Property management isn’t cheap, and the cost of hiring a property manager depends on many factors, including how much responsibility you want them to take on. In general, there are two pricing models: fixed-rate fees and commission-based fees.

Commissions

With a commission-based property management fee, the manager will take a percentage of your monthly earnings. The charges will depend on the rental property’s location and the services offered.

Generally, the average property management fees for short-term rentals can range from 25-40% of the rent collected. Generally, commissions are lower for urban properties than for rural, mountain, or beach locations.

Long-term rentals are generally cheaper to manage because there is less turnover and involvement. So, a monthly general management fee is typically between 8% and 10% of the monthly rent for a single-family home.

On the other hand, a short-term rental property requires regular cleaning and a greater commitment and attention (e.g., managing bookings across multiple channels, communicating with guests). That’s why commission-based fees for them are higher.

Fixed rates

Some property managers may charge a flat rate for a specified set of services. This fee doesn’t change depending on the number of nights the rental property is booked in a month.

This pricing model can work out well for landlords whose properties are in high demand, with continuous bookings and occupation. However, be sure to check what is included in the fee, as many companies charge additional short-term rental management fees on top of your monthly payment.

Breakdown of Property Management Fees

A property manager can take care of everything—it’s up to you to decide how involved you want them to be, but there may be additional fees. Here is a breakdown of the standard fees a property manager may charge you.

Setup fees are likely to include administration costs, creating paperwork and contracts, as well as an initial registration fee.

Placement fees may cover advertising costs, tenant screening, and check-in and checkout procedures. This could be a percentage of the rent or a flat fee.

Management fee—you’ll likely pay a percentage of the monthly rental income as a general management services fee.

Vacancy fee—if bookings aren’t their responsibility, a property manager may charge you for each empty unit, or a one-off payment to cover the possibility.

Maintenance fees—property maintenance issues are inevitable, so you should expect to incur maintenance costs.

Cleaning and laundry services fees vary depending on the size of each property and the frequency of their use.

Are Vacation Rental Management Fees Worth It?

Renting out a house on Airbnb can be a great way to generate income, but managing a rental property is a challenging job that involves numerous responsibilities and requires a significant amount of time.

Property managers can help ensure your passive income actually stays passive. Their responsibilities can range from providing a little assistance with booking handling to a comprehensive package of support services, allowing you to be completely hands-off.

Here is what they can do for you to help you with the day-to-day running of your property:

• Setting the right rental rates based on market research to ensure your listings are priced competitively;
• Marketing your property: taking professional photos and actively updating your listing on popular STR platforms;
• Verifying your guests are good guests through their prior ratings and reviews;
• Communicating with your guests to ensure a perfect guest experience;
• Managing bookings, cancellations, and guest reviews;
• Managing maintenance and repairs to ensure that everything is working.

A good property manager can make running a vacation rental property much easier (they can handle everything for you), but this comes at a cost.

Still, an efficient alternative allows you to manage your STR property yourself without requiring a significant investment of time. Short-term rental software, such as Hospitable, can help you scale many of the responsibilities and daily operations, while keeping more of your rental revenue.

All professional STR property managers use vacation rental software (also known as property management systems) to improve operational efficiency and eliminate manual processes. Vacation rental software tools help them minimize costs associated with managing short-term rental properties and ensure that all business operations run smoothly.

So, if you hire a property manager to help you manage your vacation rental, you give them 20-40% of your rental income for spending about an hour to set up automation for your property.

With Hospitable, you’ll be able to streamline your day-to-day operations, have complete control over your business, free up your time to focus on strategy and growth, and keep more money for yourself. Our STR super app offers a comprehensive set of features, allowing you to automate most tasks that can be delegated to a property manager, thereby putting your business on autopilot.

How to Save on Property Management Costs

The best reason for self-management when running a STR business is to avoid property management fees and keep all your profits. Hospitable offers a comprehensive solution for self-managers, helping you manage all aspects of your short-term rental seamlessly.

Hospitable will automate guest communication on Airbnb, Booking.com, Agoda, and Vrbo, sync your calendar and pricing across platforms, and send reminders to your team members to notify them about new tasks.

You can start with a free 14-day trial and then pay a reasonable flat monthly fee covering one property, plus small fees for additional properties with check-ins, and save on average 25 hours per month with AI automation.

Hospitable makes managing properties easier, removing the operational headaches while you perform many of the core responsibilities. Let’s examine some of the key advantages of our system.

You will be able to manage and update all your listings across multiple channels from a centralized, synchronized dashboard without worrying about juggling calendars, messaging, and cleaners across bookings. We will protect you from double-booking and overbooking with instant calendar synchronization.

You’ll be able to take advantage of our built-in Dynamic Pricing solution, which is free for all users on Host, Professional, and Mogul subscription plans. Once you enable this feature for your property, Hospitable will automatically adjust your nightly rates based on market demand, seasonality, and other factors to help maximize your revenue and maintain optimal occupancy.

You can streamline communication with your guests by scheduling automatic messages triggered by various events, such as new booking requests, check-in, checkout, new inquiries, and more.

The Hospitable’s question detection feature allows you to set automatic answers to your guests’ questions. Our system utilizes AI to scan guest messages and automatically detect questions on over 20 common topics. It will send an instant automated response on your behalf.

You can use the Suggest with AI and Improve with AI tools in your Inbox to quickly draft and correct detailed responses to your guests’ last messages when messaging your guests manually.

You can create a digital guidebook and upload it to the Knowledge Hub to educate the AI about your property, policies, local area, safety, and emergency information. The AI will use these bits of information automatically to create more accurate and relevant messages.

With Hospitable, you’ll be able to create a direct booking website and be less dependent on OTAs. By securing direct bookings, you’ll be able to establish your brand and cultivate a loyal customer base.

Hospitable allows you to create templated rental agreements and automatically send them to your guests for signature. Your guests will see agreements in their guest portals as a registration task and will be able to sign them digitally. Providing formal short-term rental agreements to your guests is a proactive step that helps set clear expectations and protects you in case of disputes or damages.

Hospitable integrates with many popular smart lock systems, helping you ensure a smooth check-in process. Our system will automatically generate unique door codes for smart locks and send them to guests before check-in. The unique code is automatically deleted after the checkout.

By automating all of these management tasks with Hospitable, vacation rental owners can save on property management fees and run their business on autopilot.

Final Thought

Owning a vacation rental can be highly profitable, but managing it requires time and effort. Hiring a property manager to assist with the day-to-day management of their properties can be a beneficial option for busy hosts, but it entails incurring high property management fees.

An alternative, cost-effective solution is to use good vacation management software, such as Hospitable. Our platform offers numerous valuable features to help hosts manage their rental properties on Airbnb, Vrbo, Booking.com, Agoda, and their direct booking websites, as well as automate 90% of repetitive hosting tasks.