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Airbnb Property Management Fees Breakdown – Are They Worth The Cost?

Everything seems to have a fee attached to it these days. When’s the last time the airline price you saw actually ended up being the subtotal? Oh, you want legroom? That’ll be an extra $50. Snacks? An extra $20. The list goes on.

Over the past few years, we’ve seen the effects of inflation on virtually every area of life. Even vacation rental industry giant Airbnb came under fire for not disclosing what you'd pay for a cleaning fee upfront, leading to a recent update in which you can toggle on and off the “full price” before taxes.

Companies find ways to nickel and dime you with seemingly arbitrary fees that should really just be part of the upfront cost. The same idea applies when it comes to Airbnb management fees. A good short term rental management company will precisely lay out expectations upfront and make what they’re charging for clear.

Unlike most fees, which only drain your wallet, Airbnb management fees can be justified if they’re saving you time and hassle, and making you more money. Before you decide to hire a short term rental property management company, it's important to understand the different types of Airbnb property management fees and whether they are worth the “cost.”

Long Term Rentals vs. Short Term (Vacation) Rentals

If you've arrived at the point of wanting an Airbnb or vacation rental manager, you probably have determined that short term rentals are a more lucrative investment vehicle. With long term rentals, the rent collected/monthly payment stays the same for the duration of the contract in a long term rental.

Even if your property rapidly appreciates in value, the rental income stays the same until you can legally raise rents. With an Airbnb property, you're able to use dynamic pricing , and adjust it according to demand and season. Airbnb property managers have pricing tools so you don't have to manually adjust said prices.

What is Airbnb Property Management?

Airbnb property management companies provide premium services that vary depending on the scope and depth of the services provided. Much like long term rental property managers, Airbnb managers offer turnkey solutions for owners and investors who want to make money from short term rentals, but either don’t have the knowledge or time to set it up themselves.

For investors wanting a more hands-on approach and greater involvement, there are some airbnb property management companies, such as Evolve, that handle the overall setup of the listing, guest messaging, bookings, etc. These companies generally come with lower management fees.

However, most seeking out the expertise of an Airbnb management company want a comprehensive, hands-on service. This includes features like listing optimization, scheduling or implementing cleaning services, routine maintenance, item restocking, and having an on-call manager. This “white glove” service often has higher fees associated with it, but said fees can be justified by the management company’s ability to double or triple the typical monthly revenue.

“So, what do these Airbnb property management fees look like? And how much will it cost me?” "Is it worth it to have a property manager?"

Airbnb Property Management Fees / Fee Structure

Commission-based pricing models: In a commission-based arrangement, the real estate management company takes a percentage of the rental revenue every month, ranging from 10%-40% depending on how extensive and comprehensive the service.

For example, Evolve charges initial setup fee of 10% but only handles the bare minimum, like property marketing, dynamic pricing, guest communication, etc. More hands-on services like cleaning, restocking, or furnishing the property are not included. On the flip side, you may sacrifice your share to go with a 40-50% commission fee, but in return receive white-glove services that handle everything from top to bottom. You’ll see more premium services like free restocking or free maintenance in a higher percentage package.

Pro: The management company is incentivized to make you more money. When your listing does well, so too does the property manager taking the cut. If they were only taking a fixed-rate every month, they may not be as motivated to optimize rental rates, occupancy, guest experience, and beyond.

Con: Some short term rental property management companies that are rigid in their pricing models and the services they provide don’t justify the cost. More often than not, this is the exception and not the rule.

Flat-fee structure pricing models: On the flip side, this pricing model is more predictable from the get-go. The management company charges a flat fee that stays the same for however long the contract stipulates. It’s less common that you’ll see a property manager operate with this structure, but there are still some out there.

Pro: You can easily budget that the company will cost, say, $500 per month. You’re able to predict your yearly expenses on management (which in this case would be $6,000 per year.)

Con: As mentioned before, some companies may feel less motivated to maximize the property’s ROI. Aside from making you, the customer, and local staff happy, they may not have as many financial incentives. Or they may wish they’d had a commission based structure if Property A is grossing three times Property B but both have the same management fee.

Factors Affecting Airbnb Property Management Fees

Several factors can affect the cost of Airbnb property management fees, such as:

Property size: While having a bigger property is a benefit when it comes to occupancy, it can also increase maintenance and cleaning costs. These costs are not exorbitant, and don’t negate the benefits of having a big property. Just something to be aware of.

Property type: The type of unit you have can affect whether or not a property manager is a.) willing to manage it, and b.) how much they’ll charge. If you have an Airbnb on a boat, for instance, there may be more upkeep required, or safety precautions to put in place. A traditional house, guest house, apartment, or condo, is much more straightforward to price and manage.

Upfront Costs (Onboarding Costs): Airbnb management companies often have “startup” costs required to get your unit into Airbnb shape. Sometimes these fees are small if the property owner already has much of the infrastructure set up to be ready to host. Other times, there’s a higher upfront cost to install elements like sound monitoring devices and smart locks, or upgrade furniture and design fixtures.

Property location: In many cases, property management companies will charge higher fees for luxury property on the waterfront. That property is going to require more intensive services and resources to keep it immaculate. That’s not to say it should get preferential treatment over other managed properties, but rather that premium features often require premium management.

Seattle Property Management Fees

The city your property is in will also have an effect on management fees. In Seattle, where are headquartered, you may have to spend more due to the competitive and expensive real estate market. Moreover, the City of Seattle has stricter regulations and requirements with higher upfront costs (such as getting into compliance with local laws, mandatory inspections and business license fees).

Is Airbnb Property Management Worth It?

This question is ultimately up to you to answer.

Whether or not Airbnb property management is worth it depends on several factors, such as the amount of rental income you can rake in, the amount of time and effort you want to put into managing your property, whether you have the necessary skills and experience, and if you think the management fees are worth it. Here are some good questions to ask yourself to determine if you’re ready to hire a short term rental manager. If you answer “YES” to most of them, you probably are ready for a property management company:

  • Do you have time to consistently go out and do repairs yourself?

  • Do you have knowledge of the Airbnb algorithm and how to optimize your property for maximum listing exposure?

  • Are you consistently losing bookings? Do you have a constantly vacant unit?

  • Are you tired of spending money on advertising costs?

  • How many units do you own? Are you trying to manage multiple short term rental properties at once?

  • Are you breaking even on your properties? Are your profits what you envisioned when you purchased them? At Stay Flourish, we can help you project what you could be making with our ROI Calculator. Or, we’d be happy to do a free consultation in which we virtually do a walk through your current listing or unit and highlight areas of improvement.

Tips When Vetting Airbnb Property Management Companies

When considering which company to hire, it's important to research and compare different companies, read reviews and check their reputation, and communicate with them about their fee structure and additional services. They may understand how to upkeep a home, but that doesn’t necessarily mean they have a full scope of knowledge on Airbnbs and short term rentals. Being able to effectively price, market, and optimize an Airbnb listing is a totally different ball game than simply creating a good environment or an appealing home.

Stay Flourish: A Reliable Property Management Company

We believe it’s crucial for property owners to have a reliable property management company (and their specific property management fees and services) if they plan on venturing into the world of Airbnb or vacation rentals in general. We know firsthand how frustrating it can be to be the sole party responsible for a guest’s happiness.

Stay Flourish is a professional property management company. If you’re interested in learning more about Stay Flourish's airbnb management services, remodeling service, or our professional cleaning service, give us a call at 206-486-6642, or schedule a free consultation here.

What are some of our unique management services?

  • SPARK Tool: We have a Proprietary Pricing Algorithm that maximizes revenue. SPARK pulls all available short-term rental data. Our team develops unique price strategies for each individual property to maximize ARPAR (Adjusted Revenue per Available Room). After that, SPARK monitors your listing and makes adjustments to give you the highest ROI. The pricing algorithm pulls real time data on local demand, and instantly changes the pricing to capture peak revenue. Every price is checked by one of our team members before it’s approved to verify you’re getting the maximum revenue & occupancy.

  • Calendar Management: We manage your property's listing on multiple platforms (Airbnb, VRBO, and make sure there are no double bookings.

  • Booking Management: Our dedicated team answers all booking requests promptly so potential guests feel welcome to book your property. Our team answers all the questions guests have about your property and accommodates any reservation adjustments that are needed. We send a unique lock code to each guest so they can check in at their convenience.

  • Guest Vetting: We assess potential guests coming to your property for both safety, cleanliness, and reliability.

  • Guest Messaging: We have a team dedicated to customer service and guest relations. Guests have direct access to our team at any point during their stay. We take the 2 a.m. call so you don’t have to.

  • Cleaner Scheduling: We know having unreliable cleaners can be a pain. Losing nights booked due to a unit not being turned over is aggravating. We have a reliable team of trained cleaners and ensure their scheduling meets the needs of your bookings.

  • Housekeeping Management: We manage the cleaning of your home. If the cleaners have questions or problems they bring them to us so you are not bothered. We also facilitate ordering all supplies that are needed so you don't have to deal with pesky inventory checks.

  • Guest Payment Management: We work with an accountant and CPA to ensure your money goes to the correct places, and is organized in the correct form to make tax season a breeze.

  • Listing / SEO Optimization: Airbnb recently updated the algorithm they use to rank properties. Our team is on the cutting edge of these changes. We do in-depth research and perform testing to see what causes properties to rank the highest. Your home's ranking is directly linked to how much revenue it makes. The boost in SEO rankings and subsequent revenue our team generates often covers our management fees.

  • Party / Noise Monitoring: We want to protect guests, neighbors, and your space alike by preventing unauthorized parties from occurring. Note, the owner needs to purchase a Minut sound detector. We will handle the setup.

  • Annual Property Inspection: Every year, we do a rigorous walkthrough of each property. Our customer success team surveys the property to determine the overall guest experience, addressing any areas of need or concern. This keeps your property in the best condition possible and helps to catch maintenance issues before they become bigger problems. If need be, we can do this bi-annually or every quarter.

  • Interior Design Consulting: We work with local designers and other creatives to offer our clients top tier design input for your space. We enhance areas in need of touching up, resulting in a huge impact on overall listing performance.

  • Dedicated Manager: We have a dedicated manager / team available to enhance your customer service experience. This management team is assigned specifically to your properties and is designed to be accessible. We pride ourselves on a low manager-to-property ratio.

  • Owner Reports: We offer quarterly data reports on the performance of your property.

  • Dispute Resolution: If a guest leaves a bad review we contact Airbnb directly and fight to get it removed. If any damages happen to the property, or the guest tries to dishonestly obtain a refund, we handle the entire process. We are your advocates. You don’t have to make a single phone call.

  • Maintenance Coordination: Running a top performing short term rental requires keeping the property in superb condition. Our team coordinates all maintenance needs for your property so you can relax knowing things are taken care of.

We also help with booking tax resources, future investment property advising, and dispute resolution.

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