The Guide to Short-Term Rental Property Management Fees

The Guide to Short-Term Rental Property Management Fees

Last Updated: January 30, 2023 by Cameron Smith

Short-term property management companies charge a variety of fees for overseeing, maintaining, and operating short-term rental properties like vacation cabins, condominiums, and more. Most short-term property management companies charge between 10% and 50% of monthly rental income, but actual fees vary heavily.

Monthly Short-Term Property Management Fees

The monthly short-term property management fee is the basic, catch-all fee that covers the majority of the company’s work and expenses. This most commonly costs between 20% and 40% of the monthly rental income.

Generally, the easier it is for the property management company to maintain, staff, and operate a property, the cheaper its services will be. Managing a remote mountain cabin, for instance, is tougher than managing a short-term rental property located in the heart of a metropolitan hub.

Monthly property management fees can also vary depending on the labor required to operate the properties in question. A single-family home available for short-term rentals through Airbnb, for example, will not require as much work compared to a condominium complex for vacationers located on a local beach.

Fixed-Rate Fee Structure

The property owner pays the management company a fixed fee regardless of how much rental income the property brings in. 

This is especially advantageous in a high-occupancy property where a busy season doesn’t result in paying a higher cost to your property management company. However, during down times, it’s possible to lose money on the property because the cost is the same, regardless of vacancy.

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Guaranteed Income Fee Structure

The guaranteed income fee structure means that property managers offers a guaranteed income to the owner, even if the property doesn’t have any tenants or guests.

A guaranteed income fee structure might seem beneficial to a homeowner when their single-family home doesn’t have any tenants.

But once the property management company starts advertising the property effectively and bringing in regular guests, the management company suddenly starts making much more of a profit. The property owner, however, does not receive any of that extra income since they only receive the guaranteed income stated by their contract.

A guaranteed income fee structure is a “safe” fee structure on the part of the homeowner/property owner. But it doesn’t allow the property owner to take advantage of better market conditions or improve their property’s reputation. It’s not a recommended fee structure to pursue.

Commission Fee Structure

The commission fee structure is the most common fee structure for short-term property management business arrangements. Through the commission fee structure, a short-term property management company collects a percentage of rental income each month, then gives the rest of the rental income to the property owner. This percentage, as stated above, is typically between 20% and 40% of monthly collected income.

With this structure, you can plan expenses as a set percentage of your income. It also incentivizes your property management company to do a good job, as they get paid more when your properties do well.

It’s also more beneficial for your business that when your units aren’t doing well that you get to pay a lower fee.

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What Services Does the Monthly Short-Term Property Management Fee Include?

The monthly short-term property management fee covers the majority of common services provided by management companies. These services include:

  • Marketing and Listing Services
  • Handling the Booking Calendar
  • Guest Check-in and Check-Out
  • Property maintenance and repair services
  • Property cleaning services, including housekeeping services
  • Bookkeeping services

Marketing and Listing Services

They are responsible for taking good photos of the properties, marketing them on websites, building and maintaining a good corporate website, and listing for-rent properties on sites and apps such as Airbnb.

In addition to marketing and listing properties once, property management companies are responsible for regularly updating marketing materials and relisting properties as soon as they become available again.

Handling the Booking Calendar

One of the main responsibilities for a property management company is to be on top of the guests coming and going. They’ll coordinate when the guests will be there, when they’re leaving, when housekeeping can enter the property, and ensuring there aren’t double bookings.

In general, this isn’t a huge task per event, but the constant nature of it makes it especially useful for a property owner to outsource.

Guest Check-in and Check-Out

Someone has to make sure that each new guest can access the property without incident (e.g. get access to a key or code) and also be available to answer questions when someone can’t access the property. Property managers will also ensure that guests know the checkout process and what’s required of them before leaving the property.

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Maintenance and Repair Services

Depending on the specifics of the property in question, short-term property management companies may tackle maintenance and repair tasks including:

  • Picking up trash on the property
  • Repairing damage
  • Mowing the lawns, trimming the hedges, and performing other yardwork
  • Raking leaves and shoveling snow

Furthermore, if the short-term rental property complex has a front office or business premises, they are usually responsible for maintaining and repairing those as well.

Cleaning Services

Cleaning services ensure that each short-term rental unit looks attractive and comfortable to new guests, helping to ensure that they maintain as high an occupancy rate as possible.

For example, short-term property management companies may perform cleaning services like:

  • Changing all of the linens when guests leave
  • Vacuuming or mopping the floors of rental units
  • Cleaning the bathrooms of rental units
  • Changing the trashes both within rental units and around the short-term rental property

Depending on the scale of the rental operation, the short-term property management company might need to hire a full-on housekeeping crew, which moves from unit to unit to ensure everything is neat and tidy for incoming guests. If the short-term rental property is relatively small, however, the work may be only occasional, and fees will be lower as a result.

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Ancillary Services

Fees include the cost for various other labors, such as bookkeeping and accounting, encouraging tenants to leave good reviews, and more.

Good bookkeeping is important so that property owners know how much money they make, how much they spend in terms of fees, and other key financial information. To that end, short-term property managers are responsible for making monthly financial statements and end-of-year financial statements depending on the policies outlined in their contracts. These can include cash flow reports, income statements, etc.

It’s always wise to encourage satisfied guests to leave good reviews as well. This helps to drive more tenant occupancy, as most people will not use a short-term rental property without checking reviews beforehand. Your property management company may encourage departing tenants to leave positive reviews via written notes or verbally, such as during check-out.

Additional Short-Term Property Management Fees

In addition to paying a monthly short-term property management fee, hiring a property management company often involves fees for services that aren’t included in the monthly charge. Depending on your contract, you may pay short-term property management fees such as:


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    Guest Contact/Communication Fees

    If you want your short-term property manager to stay in regular contact with guests and maintain open communication channels, you’ll need to pay them an extra fee, typically $50-$100. This fee is usually rolled into the monthly charges you pay for their core services.

    Guest contact and communication services are highly important if you don’t want to be in charge of handling customer complaints or questions while they’re residing at your properties. For instance, if a guest has a question first thing in the morning, your short-term property management company staff will handle it.

    Depending on the contract you sign, you may not be allowed to legally communicate with your property guests if your short-term rental property management company has control over those channels.

    Direct Bookings Fees

    Some short-term property managers charge direct booking fees if guests book stays at your rental properties through them instead of through listings or online apps. Direct booking fees are usually quite cheap, typically anywhere from $10-$30 per incident, since they aren’t too common.

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    Deep Cleanings/Inspections Fees

    It’s generally a wise idea to deeply clean your short-term rental properties at least twice per year, and your short-term rental property manager may charge you for deep cleanings and associated inspections when they occur. These fees are usually less than $100 per charge.

    You can maintain a reserve fund for deep cleanings and inspections of a few hundred dollars. Then, your property management company can simply dip into that escrow account when needed. However, you’ll need to make sure the account is refilled with money from time to time so it never runs dry.

    Emergency Repair Services Fees

    If one or more of your short-term rental properties requires emergency repairs, your property manager will charge you for any extra costs that come out of their pocket. Emergency repair services fees vary and are typically invoiced directly to you or charged to a repair reserve fund escrow account.

    In some cases, your short-term property management contract will include stipulations or requirements for a repair reserve escrow account. In these cases, you’ll need to maintain a certain monetary balance in the escrow account at all times. This is a simple solution to make sure your property management company always has enough money to handle emergency repairs rather than having to invoice you directly for each incident.

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    Stocking Fees

    Stocking fees cover the cost of labor related to restocking perishables or extra goods sold to your short-term tenants/vacationers. Stocking fees typically run anywhere from $5-$25 per room or unit, but they can also just cover the cost of any consumed goods plus a little extra. They’re charged each time property management staff clean and maintain a room in between tenants.

    Note that while stocking fees might be extra, they might also be wrapped up in your monthly short-term property management fee. In that case, you’ll pay a flat restocking fee no matter how many perishable goods or consumables your tenants take with each visit. In some cases, this could result in you paying less than the cost of those perishable goods or more.

    Third-Party Supply Purchase Markups

    From time to time, your property manager will need to pay for third-party supplies, like cleaning supplies, snacks to restock units, and more. Your property manager will charge you a markup for third-party resupplies and purchases; this is usually a small percentage over the purchase price.

    Third-party supply purchase markups are usually anywhere between 1% and 5% of the purchase price. Since this can result in very small fees, many short-term property management companies bundle supply purchase markups together and bill you at the end of the month with an invoice.

    External Amenities Fees

    External amenities fees cover the cost of installing or maintaining external amenities like gardens, pools, hot tubs, and more. External amenities fees can run anywhere from $50 to a few hundred dollars depending on how many amenities you have to oversee.

    Of course, external amenities fees might also be rolled into your monthly commission fee. But they might be charged separately if you gain new external amenities in the middle of your property management contract.

    Guest Removal Fees

    Problematic guests or tenants at your short-term properties must be removed by your property manager, so they will charge you a fee for associated labor and court expenses. Guest removal fees can be anywhere from $30-$200 or more per tenant, in addition to any extra fees charged to the property manager by the court system.

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    Vacancy Fees

    Some short-term property managers charge vacancy fees to cover the cost of maintaining vacant properties/rental units. Vacancy fees can be flat, one-time fees, such as $200 if a unit remains vacant for one month, or ongoing monthly fees equal to the expected rent you would collect from a guest. You should never sign a contract with a management company that charges exorbitant or regular vacancy fees.

    However, some vacancy fees are acceptable under specific circumstances. Many of the best property management companies expect to be compensated for the ongoing labor and expenses associated with keeping your property maintained, even if one or more units are currently vacant. Because of this, they may charge one-time, flat fees to help them cover the expenses associated with additional marketing or guest outreach work.

    Contract Termination Fees

    Contract termination fees kick in when you end your business relationship with a short-term property manager. Contract termination fees can vary dramatically, ranging from a few dollars to several hundred or several thousand dollars.

    Generally, contract termination fees are not worthwhile and aren’t intended to cover any real labor on the part of the property manager. However, if you feel the property manager is otherwise a good hire, small early contract termination fees – such as less than a few hundred dollars – aren’t deal breakers. But they’re still red flags no matter what.

    Are Short-Term Property Management Companies Worth the Cost?

    Short-term property management companies will usually charge you between 20% and 40% of your monthly rental income each month. In addition, some short-term property managers charge ancillary fees to cover unexpected expenses, like emergency repairs, guest removal, and restocking perishable supplies.

    Despite the cost, you might make more money with a quality short-term property manager working for you than otherwise. The best short-term property management companies help your properties fill up with guests more quickly, cover marketing and other services, and make the property more attractive.

    If you want to enjoy your free time or expand your portfolio, you may have no choice but to hire some assistance at some point.

    To determine whether a short-term property manager is worth the cost:

    • Calculate your expected income, assuming that your short-term rental properties have a regular influx of guests coming and going
    • Determine the likely rate you’ll pay for a property manager with the fee ratios above
    • Then, subtract the rate you’ll pay for property management services from your expected income. That’s your take-home cash or real profit

    Once you know your expected profit with a property manager, you can make the best decision for your goals.