Before hiring a professional property manager, vacation rental owners need to understand the core of Airbnb management fees. The costs charged by Airbnb managers are as diverse as the services that they provide, so it’s important for hosts to know whether the fee offered to them is competitive in the local market and worth it for the set of services covered by it.
The average fees for full-service short term rental management vary between 25% and 40% of monthly revenue (including cleaning fees), while the typical range for half-service management is 10-15% of income.
Summer, the top ranked vacation rental management company, is doing something different in the industry. The company fees start at 20% of monthly revenue excluding cleaning fees, for truly comprehensive services. Meanwhile, Summer is selective about the properties it signs based on its ability to operate a specific home. This results in a smaller portfolio of very valuable homes that consistently outperform both host and guest expectations, making the property management fee more than worth it.
Airbnb Management Fee Overview
The Airbnb property management fee is the amount of money that a vacation rental owner pays to a professional property manager specializing in short term rentals to perform the tasks needed to run an Airbnb property.
Short term rental management fees are typically paid on a monthly basis. In most cases, they are calculated as a percentage of the pre-tax revenue generated from reservations over the course of a month, where the revenue includes the daily rates, the cleaning fees, the pet fees, and other additional fees. This means that owners only pay when their property is occupied and they earn an income from it.
Flat fees set up as fixed dollar amounts regardless of the amount of rental income are rare in the vacation rental management industry. In this way, Airbnb managers are incentivized to maximize the performance of the properties within their portfolio in order to optimize their own income too. It’s a win-win situation for both owners and managers.
The main reason for the major differences in the fees charged by different property managers is the varying services that they provide to properties and hosts. Usually the Airbnb management fees pay for:
- Rental listing on multiple booking channels
- Listing optimization including Airbnb SEO
- Marketing and advertising
- Dynamic vacation rental pricing
- Guestbooks preparation
- Guest support and communication
- Host support and communication
- Check-in and check-out coordination
- Cleaning, laundering, and restocking supplies
- Regular inspections
- Repairs coordination
- Tax collection and remittance (where legally required)
- Tax documentation
- Financial and performance reporting
- Access to an online owner portal
Some Airbnb property managers offer additional services, some of which are covered by the standard fees, while others are not. Extra services include:
- Vacation rental design and furnishing
- Home remodeling
- Help with issuing and renewing short term rental permits and licenses
- Airbnb insurance covering property damage and general liability
Vacation rental hosts are willing to pay Airbnb property management costs in order to enjoy passive real estate income from their investment property. Operating a short term rental business can easily turn into a full-time job, especially for a non-professional, which makes it an unfeasible endeavor for those with other 9-to-5 jobs or those investing away from home.
Additionally, the best Airbnb management companies are able to enhance performance, improve earnings, and cut down costs, which means that owners might actually make more money in exchange for paying certain fees.
Meanwhile, the fees charged by managers are a recurring cost for owners which eats into the cash flow that they get. Thus, before deciding to work with a specific company, an owner needs to understand the exact fees that they will need to pay, the calculation process, the payment frequency, the payment method, and the services covered by the fee. In other words, a host needs to make sure that the fees are worth it.
Average Airbnb Property Management Costs and Fees
Generally speaking, the average Airbnb management fee is between 10% and 45% in the US market. This is a very wide range as there are multiple factors that affect the size of property management costs. The main factor is the management method: half-service vs full-service management.
Let’s take a look at the fees that companies within these two categories typically charge.
Standard Fees for Half-Service Airbnb Management
In the US, the average half-service Airbnb property management fee is between 10% and 15% of monthly revenue.
Half-service short term rental management refers to streamlining and automating the most repetitive and time-consuming activities needed to list a property and welcome guests. It is largely based on the introduction of technology to the property management process with minimum human intervention.
This style of Airbnb management can significantly cut down the time that an investor needs to spend on managing their property, but it doesn’t allow for passive income. Hosts still need to be personally involved in the business.
Half-service Airbnb managers typically provide:
- Listing creation and optimization
- Listing distribution on multiple platforms
- Marketing
- Guestbooks and property instructions
- Booking calendar management
- 24/7 guest communication including proactive communication as well as responding to guest inquiries
- 24/7 host communication
- Guest review management
- Reporting to the host
Following are the most popular companies in the half-service vacation rental management industry and the fees that they charge:
- Evolve: 15% on booking revenue for Core and 15% on booking revenue for Plus
- RedAwning: 10% on booking revenue plus a standard 3% credit card processing fee
While 10-15% of monthly revenue sounds tempting, owners need to keep in mind that this fee covers only limited services. They still need to take care of things like coordinating cleaning, restocking, maintenance, and repairs.
Typical Fees for Full-Service Airbnb Management
The standard full-service Airbnb property management fees range between 25% and 40% of monthly income.
Unlike half-service companies, full-service Airbnb managers take care of everything that’s needed to have a successful, legally compliant, optimized short term rental business. This leaves owners with nothing to do, other than enjoy their passive income. On the downside, they lose control over the management of their investment property. But this should be of no concern as long as they’ve put the time and effort to find the best service provider in the local market.
In addition to the services listed above, full-service managers also take care of:
- Providing legal and tax guidance and support
- Preparing properties for guests, including cleaning, doing laundry, and stocking supplies
- Maintaining amenities
- Inspecting properties
- Coordinating repairs via an in-house team or local vendors
Major full-service Airbnb property management companies and their fees include:
- Summer: Starting at 20% of revenue, excluding cleaning fees, for comprehensive services
- Vacasa: Can exceed 35% of revenue, as reported by hosts
- AvantStay: Starting at 20% of revenue, as reported by hosts
While sharing 20% or more of rental income with a professional property manager sounds like a lot, in many cases Airbnb management fees are worth it. Ideally, they should come along with optimized performance (which frequently compensates for the fee) and a passive investment strategy.
Additional Costs Charged by Airbnb Managers
The top vacation rental management companies charge comprehensive fees that cover all the services that they provide. However, some Airbnb property managers charge additional fees for some core or extra services.
Extra fees can include:
- Onboarding fee: While this is not the standard in the industry, some property managers charge an initial fee to get properties and hosts onboarded. This is usually a flat fee and can be between $300 and $1,000.
- Design and furnishing: The best Airbnb managers offer design and furnishing services in line with local market trends and ideal guest persona preferences to increase bookings and maximize revenue. The fee can vary widely, depending on the property type and size, the level of furnishing, the quality of furniture, the required amenities, the included services (delivery, installation, etc.), and the market. Summer vacation rental interior design and furnishing services start at $10,000.
- Smart home device installation: Most short term rental managers charge a one-time fee to provide properties with smart home devices which enhance safety and security and allow for keyless check-ins and check-outs. The exact cost depends on the number of devices and the brand.
- Professional photography: The majority of vacation rental managers provide professional photos of the property as part of the listing optimization service. Nonetheless, some charge an additional one-time fee for professional photography.
- Renovations and remodeling: Some Airbnb property management companies perform large renovation and remodeling projects for properties that they work with. The cost can be very different, reaching tens of thousands of dollars for large-scale renovations.
- Amenities maintenance: Companies like Summer include the maintenance of swimming pools, hot tubs, lawns, and other amenities in the standard monthly fee, whereas other companies - like Vacasa - charge for them separately. This can be a monthly fee or a fee per maintenance work.
- Damage and general liability coverage: Some property management companies offer short term rental insurance, usually in partnership with insurance companies. While Airbnb insurance is not obligatory in the US market, it is highly recommended for owners in order to avoid potentially costly events. The cost can be an annual premium or a fee per reservation.
- Inspection fee: Most Airbnb managers conduct regular inspections of the properties that they manage to ensure that all small issues are fixed right away so that they can continue to earn income from properties in their portfolio. Others, however, choose to charge an extra inspection fee, in the range of $100 per visit.
- Fixes and repairs: While the majority of companies coordinate repair works as part of their standard fees, Airbnb management fees do not cover the cost of actual repairs. Some property managers have an in-house team of professionals who can do various tasks, while others work with local vendors that have been carefully vetted.
- Early termination fee: The best Airbnb managers offer flexibility to owners so that they can stay for as long as they are happy with the quality of provided services. Others, nevertheless, choose to impose a penalty fee for early termination of the vacation rental management agreement. This should be a red flag for hosts as it is not typical in the industry.
In addition to the fees and costs that they demand from hosts, short term rental property managers also charge certain fees to guests. These need to be clearly specified in the listing and include:
- Cleaning fee: This is a one-time fee paid per booking for professional cleaning services between stays. In case a host decides to have their property for personal use, they also need to pay this fee at the end of their stay.
- Pet fee: Most pet friendly Airbnb rentals have an additional pet fee which varies by the type of pets, their number, and their breed. It is only paid by guests who bring along a pet.
- Extra guest fee: Some property managers allow additional guests to stay at the property as long as the total number of guests does not exceed the legal limit and the owner is fine with this. It is a standard practice to charge a small fee for every extra guest.
The fees for Airbnb property management can be very different from one market to another and from one manager to another. Thus, it’s crucially important for hosts to understand all one-time and recurring fees and expenses that they will need to cover before hiring a company.
Factors Affecting Airbnb Property Management Fees
There are a number of factors that impact the cost of vacation rental management fees. These include:
- Property management company: Each Airbnb manager charges a different fee that makes sense for their business model and the provided services. This is by far the most important factor determining the property management fee.
- Type of management: Full-service management costs significantly more than half-service management because of the additional work done by the firm and the peace of mind offered to the host.
- Airbnb management services: There is no standard service package that all hosts want and all managers provide. Services vary from one company to another and are usually customizable to meet the precise needs of each property and each owner. The more services that a manager offers, the higher the fees that they charge.
- Location: Different locations incur different Airbnb management fees to account for local prices. Moreover, some isolated markets have higher fees due to the lower competition.
- Property type and size: Single family homes and townhouses that have outdoor spaces usually cost more to manage than simpler properties like apartments and studios. In general, luxurious properties might have lower fees in terms of percentages because of the higher income that they generate.
- Amenities: The number of amenities and the maintenance work that they require also raises the cost of management.
- Property condition: Homes in poor condition might incur bigger management fees because of the increased risk and the lower expected revenue.
- Monthly revenue: Since vacation rental management fees are calculated as a percentage of rental income, properties that bring lower revenue are frequently subject to higher fees. To avoid this, Summer only works with select properties that make a minimum of $50,000 per year to be able to maintain industry-low rates for high-quality services.
- Type of rental: Some companies charge smaller fees for mid-term rentals than for short term rentals because of the less guest turnover work.
- Property management agreement: Annual contracts might come with lower monthly fees than monthly contracts. However, there might be early termination fees to cancel before the end of the year.
Some property managers ask for a universal fee in all markets and for all property types. Others adjust their costs to reflect differences between locations and properties. In any case, hosts need to have a clear understanding of the fee they will need to pay before hiring a professional property manager.
How Managers Calculate Airbnb Management Costs
The standard practice in the short term rental management industry is to calculate the monthly management fee on the total revenue generated by the property. This is the sum of the booking revenue and the cleaning fees. The booking revenue is calculated by multiplying the average daily rate by the occupancy rate, and the total cleaning fees are added to the product.
Let’s take a look at an example:
A property has a nightly price of $180 and was rented out for 20 days over the past month as a result of 15 reservations. The cleaning fee is $75. The property manager charges 20%.
Total revenue = $180 x 20 + $75 x 15 = $4,725
Airbnb management fee = 20% x $4,725 = $945
As a leader in the market, Summer does things differently. The vacation rental management fees are calculated on the booking revenue without the cleaning fees.
Booking revenue = $180 x 20 = $3,600
Summer Airbnb management fee = 20% x $3,600 = $720
This means that with Summer this host saves $225 per month in management fees, which goes straight to their pocket, without compromising the quantity and quality of services.
How much an owner can save with Summer depends on their specific property and revenue, and monthly savings can easily exceed a thousand dollars for larger properties with higher ADRs.
How Airbnb Management Fees Are Charged
Airbnb property managers charge their monthly fees directly from the booking revenue. Once you hire a company, they start collecting the booking fees as well as all extra fees, such as cleaning fees, pet fees, extra guest fees, etc. At the end of the month, they calculate their share of earnings, after which they make payments to the booking platform and pay cleaners. They also remit taxes they have collected from guests to relevant tax authorities.
In case any additional expenses, like repairs, are needed, the manager retains the necessary funds. In most cases, property managers charge maintenance amounts up to a couple of hundreds of dollars directly, while they ask for the owner’s approval and permission for larger expenses.
At the end, the Airbnb management company transfers the remaining monthly revenue to the owner. This is known as the owner payout. This is the money that the host makes after covering recurring business expenses. Owner payouts are transferred to the host on a monthly basis, usually a few days after the end of the calendar month. Owners do not need to worry about making payments to the property manager or other vendors.
Tips on How to Lower Your Airbnb Property Management Costs
Airbnb management fees are not set in stone. Typically owners can manage to decrease the amount of money they need to pay to a property manager, regardless of their market and their property.
Here are a few tips on how to minimize the cost of managing your property without sacrificing the quality of services you provide to guests:
- Talk to local Airbnb hosts: The first step is to identify local investors who work with property managers and find out what fees they pay and what services they receive in exchange. This will give you a good idea of the average Airbnb management fee in the market as well as introduce you to some of the best companies around.
- Check out multiple property managers: Don’t hire the first property manager that comes your way. Research different options, including both small, local managers and large, nationwide companies. Sometimes managers who are just getting started offer discounted rates to attract their first few customers, and sometimes national companies are able to offer better rates due to economies of scale.
- Consider half-service Airbnb management: Evaluate your needs and check out half-service providers if you can take care of some tasks or you have a team that can handle things, such as cleaning, restocking, and maintenance.
- Build your own team: Oftentimes it’s worth putting the effort into creating your own Airbnb management team, especially if you own or plan to buy a number of short term rentals. This doesn’t have to be a full-scale team. You can hire someone to clean, restock supplies, and do repairs and ask the property manager to use your own team while lowering their management fee.
- Look for a partner: Instead of hiring a professional property manager, you can work with a local partner, or an Airbnb co-host. You can divide the responsibilities based on your skills, experience, and availability. This is likely to cost you significantly less than working with a vacation rental management company.
- Bring multiple properties to the same manager: If you own more than one short term rental, get the same manager to work with all of them. Most companies offer sizable discounts for numerous properties.
- Optimize your property: It’s worth giving your property a makeover that will make your property more competitive in order to increase the daily rate and push up occupancy. As your rental gets more attractive, the monthly revenue will go up, which means that the property manager is likely to lower the percentage that they charge.
- Negotiate: Finally, there is no harm in asking for a discount directly. After meeting with a few property managers and getting quotes from them, you can use this to negotiate a better management fee with your favorite Airbnb manager from the list.
Consider these tips before signing a property management agreement. After all, every dollar that you save increases your own cash flow and profit.
Are Airbnb Management Fees Worth It?
The short answer is: It depends.
Whether hiring a professional property manager and paying them monthly fees is worth it depends on multiple factors. These include the services that they provide, the quality that they deliver, the fees that they charge, and - ultimately - the performance improvement that they bring.
The best way to decide if Airbnb management fees are worth it is to calculate how much you expect to pay to the manager and how much additional revenue you expect to earn due to their services. If hiring a property manager will not decrease your earnings, it’s probably a good idea, taking into consideration the significant reduction in your personal involvement in the property.
The Bottom Line
Average Airbnb management fees range between 10-15% for half-service and 25-40% for full-service provision. The exact amount depends on the property manager, the location, the services, the property type, the monthly revenue, and the quality of management. Before deciding if these fees are worth it, owners should make sure that they are getting the best value for money in the local market.
With Summer, property owners pay fees starting at only 20% of revenue (excluding cleaning fees), for comprehensive services. You can forget about tiresome tasks, such as pricing, marketing, communicating, and cleaning, while your property outperforms at least 95% of comps in the local area. Airbnb design and furnishing services are also available, starting at $10,000 per property.
