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    Airbnb Property Management Fees

    The Airbnb property management fees depends on the market. The vacation rental industry has proven to be one of the most exciting areas of real estate over the past few years. With more people having the freedom to work remotely, many are choosing to buy a second home and rent their primary or secondary residence for additional income. Unlike traditional long term rentals, short term rentals provide owners the flexibility to rent out their property for as much of the year as they want to earn income on it.


    With greater financial returns, increased flexibility, and less wear and tear as a result of regular cleaning it’s no surprise that so many owners are turning to Airbnb style rentals as a way to monetize their real estate. The only challenge with short term rentals, as many come to realize, is they require more day to day management compared to long term rentals. As a result, owners look to Airbnb property management companies to assist them with enjoying the benefits without having to do all the work.


    The first thing many owners want to know when assessing management companies are the fee structures. In almost all scenarios, the cost of Airbnb management will be a commission based on earnings. In most scenarios, the range of Airbnb property management fees from 5% to 25%. What a company actually quotes an owner is based on multiple factors which we will explain below.


    Type of Property


    Every property is different, and depending on the property type it will require a different level of management. The easiest properties to manage tend to be condos and condo hotels, while the hardest are older homes and buildings. With a condo hotel, it’s not uncommon for the building to offer a check in service and sometimes even a cleaning service. The building HOA or maintenance fees often take care of maintaining the property, so the management company’s role is primarily booking and coordination focused. In a condo, it’s typically similar however it’s much less common for the building to help with check in or cleaning services. With older homes and buildings, there is often more unexpected maintenance and upkeep requirements. This results in more work on the property management side as well as managing guest expectations when things happen. The best Airbnb property management companies will factor in the level work involved when quoting the cost of their service. 


    Income Potential of Property


    The income potential of the property is one of the biggest factors in determining management fees. A small condo hotel may not require as much work as a big house, but it’s almost certainly not going to have the same level of earnings assuming the location is similar. There can be quite a difference in the earnings estimate of an Airbnb property depending on the size, quality of rental, and location. There are properties that can earn $200,000 USD or $300,000 in gross earnings for the year. This type of property will earn a management company significantly more than a property which makes $30,000 a year. Because of this, the Airbnb property manager will generally provide the owner a discount on their commission to win the client’s business. While luxury rentals can take multiple times the effort of a regular home or condo, it’s typically not five or ten times more effort, and so the commission will be adjusted to reflect the Airbnb earnings. 


    Length of Rentals


    While a lot of owners are interested in high margin traditional vacation rentals, some prefer longer stays of a month or more to minimize the level of turnover between guests. Others have properties in cities with a 30 day minimum rental requirement as required by local short term rental regulations. In most short term rental markets, long term stays are not as profitable as shorter stays but they require significantly less work. Oftentimes a guest will book for not just one month, but multiple months. The lack of turnover makes it much easier for companies to offer a lower commission than they would to owners of a comparable property interested in doing short term rentals. As more people work remotely, owners are more curious than ever to know how to get longer stays on Airbnb. 


    Type of Service


    Owners can require different services from Airbnb managers. The most common need for owners is full service short term rental property management. This can work well for people who want to be completely hands off and don’t mind paying the costs associated with a full solution. However, some investors want to save money on management fees to increase their ROI. Others feel more comfortable handling part of the process themselves and having a partner take on the responsibilities they don’t want to or can’t manage. Some owners live near the property and can handle the on the ground logistics of maintenance and / or cleaning. On the other end of the spectrum, some may prefer to manage the bookings and guest communication themselves while having a manager handle the local component. Depending on the level of service an owner is looking for, the management fee will vary.


    Market Seasonality


    There are different types of Airbnb markets and almost every area has a peak season and a low season. A good management company will change prices and update the calendar availability rules (e.g. min stay) based on seasonality patterns. Historically, there has been a relationship between the level of seasonality and what management companies charge. Urban areas with more year round travel and business traffic tend to be less seasonal, and management companies have charged lower rates in the past. Traditional vacation rental markets by lakes, mountains, and other natural landscapes have much more vacancy during the low season. To compensate for having to maintain their properties without much commission during this time, management companies in these markets have historically charged more. As the popularity of Airbnb and VRBO increases, these managers have had less difficulty marketing their properties so in some traditional markets commissions have gone down.


    Every company has a different approach to its service, and while the above factors are generally true they can vary depending on the specific company. In addition to management fees, there are other considerations to determine which is the best Airbnb property management company for an owner. The quality of service, communication, ability to generate revenue, and guest experience are also important factors when choosing who to work with. With new travel and lifestyle trends shaping the future of work and leisure, it’s a great time to be a short term rental host.