Understanding property management fees is one of the most important steps in deciding whether to hire a manager for your vacation rental. The fee structure you agree to will directly impact your bottom line for years to come.
This guide breaks down exactly what property owners pay, what’s included (and what isn’t), and how to evaluate whether you’re getting fair value.
The Three Fee Structures You’ll Encounter
Property management companies typically use one of three pricing models. Each has trade-offs worth understanding.
Commission-Based Fees (Most Common)
The majority of vacation rental managers charge a percentage of your gross rental revenue. Industry-wide, this ranges from 10% to 40%, with most professional managers falling between 18% and 25% for full-service management.
How it works: If your property generates $50,000 in annual revenue and your manager charges 20%, you’ll pay $10,000 in management fees.
The advantage: Your manager’s income is directly tied to your property’s performance. They’re incentivized to maximize bookings and nightly rates.
The consideration: During slow months, you pay less—but during peak season, you pay more. Some owners feel they’re penalized for success.
| Revenue Tier | Typical Commission Range |
|---|---|
| Under $30,000/year | 25-35% |
| $30,000-$75,000/year | 20-28% |
| $75,000-$150,000/year | 18-25% |
| Over $150,000/year | 15-22% |
Flat Monthly Fees
Some managers charge a fixed monthly amount regardless of occupancy or revenue. This is less common for vacation rentals but more typical in traditional property management.
Typical range: $100-$500 per month for limited services, $500-$1,500 for comprehensive management.
The advantage: Predictable expenses make budgeting easier. You keep 100% of revenue growth.
The consideration: You pay the same amount during vacant months. The manager has less financial incentive to maximize your bookings.
Hybrid Models
Some companies combine approaches—a lower base commission plus flat fees for specific services, or tiered commissions that decrease as revenue increases.
Example structure:
- 15% commission on first $50,000 revenue
- 12% on revenue between $50,000-$100,000
- 10% on revenue above $100,000
- Plus $150/month technology fee
What’s Typically Included (And What Costs Extra)
The advertised commission rate rarely tells the full story. Here’s what to clarify before signing.
Usually Included in Base Commission
- Guest communication and support
- Booking management across platforms
- Listing creation and optimization
- Dynamic pricing adjustments
- Coordination of cleaning and maintenance
- Review management
- Basic financial reporting
Often Charged Separately
| Service | Typical Cost |
|---|---|
| Onboarding/Setup | $250-$1,000 one-time |
| Professional Photography | $150-$500 one-time |
| Deep Cleaning | $200-$500 per occurrence |
| Turnover Cleaning | $75-$250 per turnover (often passed to guests) |
| Maintenance Repairs | Actual cost + 10-20% markup |
| Restocking Supplies | Actual cost + markup or flat monthly fee |
| Linen Service | $15-$40 per turnover |
| Pool/Hot Tub Service | $100-$300 per month |
| Lawn Care | $75-$200 per month |
| Permit/License Management | $100-$300 per year |
The Hidden Cost: Early Termination Fees
Most management contracts include penalties for ending the agreement early. Common structures include:
- Flat penalty: $500-$2,000 regardless of timing
- Remaining term fees: Payment of 2-6 months of projected commissions
- Graduated reduction: Full penalty in year one, reduced thereafter
Always negotiate termination terms before signing. A 30-60 day notice period without penalty is reasonable for either party.
Full-Service vs. Limited Service: What’s the Difference?
Not all property managers offer the same scope of services. Understanding the tiers helps you compare apples to apples.
Limited/Co-Host Services (10-18% typical)
- Guest messaging and booking management
- Check-in/check-out coordination
- Cleaning scheduling
- Basic pricing adjustments
- Listing maintenance
Best for: Owners who want to stay involved, handle their own maintenance, and have local presence.
Full-Service Management (18-30% typical)
Everything in limited service, plus:
- 24/7 emergency guest support
- Maintenance coordination and vendor management
- Regular property inspections
- Interior styling and supply management
- Revenue optimization and market analysis
- Regulatory compliance monitoring
- Owner reporting and tax documentation
Best for: Remote owners, those with multiple properties, or owners who want truly passive income.
Premium/Luxury Management (25-40% typical)
Full-service plus:
- Dedicated property manager (not shared across many properties)
- Concierge guest services
- High-touch owner communication
- Premium amenity management
- Direct booking website management
Best for: High-end properties where guest experience and property care justify the premium.
Factors That Influence Your Rate
Several variables affect what a manager will charge for your specific property.
Property Characteristics
- Size: Larger homes require more cleaning time, supplies, and maintenance
- Amenities: Pools, hot tubs, and specialty features need specialized care
- Age/Condition: Older properties typically need more maintenance attention
- Location: Remote properties may have higher vendor costs
Market Factors
- Seasonality: Highly seasonal markets may command higher percentages
- Competition: In saturated management markets, rates trend lower
- Average nightly rate: Higher-revenue properties often negotiate lower percentages
- Occupancy patterns: Properties with fewer, longer stays cost less to manage per dollar earned
Your Requirements
- Reporting frequency: More detailed reporting may cost more
- Owner stays: Frequent personal use affects manager’s earning potential
- Restrictions: Limits on guest types, minimum stays, or pricing affect revenue
How to Negotiate Better Rates
You have more leverage than you might think, especially if you bring a desirable property or multiple units.
Before You Negotiate
- Know your property’s potential: Get revenue projections from multiple sources
- Understand local rates: Talk to other owners in your area
- Identify your priorities: What services matter most to you?
- Have alternatives: Get quotes from at least three managers
Negotiation Strategies That Work
Multi-property discounts: If you have multiple rentals (or plan to acquire more), negotiate portfolio pricing upfront. Typical discount: 2-5% off standard rates.
Performance incentives: Propose lower base rates with bonuses for exceeding revenue targets. This aligns incentives.
Longer commitments: Some managers offer reduced rates for 2-3 year agreements. Weigh this against flexibility.
Bring your own vendors: If you have reliable, cost-effective cleaners or handymen, negotiate to use them instead of paying the manager’s markup.
Off-peak signing: Managers are more flexible during their slow season when they’re building their portfolio.
Red Flags in Fee Discussions
- Unwillingness to provide a detailed fee breakdown in writing
- Significantly below-market rates (often indicates hidden fees or poor service)
- Pressure to sign quickly without time to compare
- Vague language about “additional fees as needed”
- Long contract terms with steep termination penalties
Calculating Your True Cost
Before signing, project your actual annual expense including all fees.
Example calculation:
| Item | Amount |
|---|---|
| Projected annual revenue | $60,000 |
| Management commission (22%) | $13,200 |
| Onboarding fee | $500 |
| Monthly technology fee ($50 × 12) | $600 |
| Deep cleaning (2× per year) | $600 |
| Maintenance markup (estimated) | $400 |
| Total first-year management cost | $15,300 |
| Effective rate | 25.5% |
This effective rate—total fees divided by revenue—is the number that matters, not just the advertised commission.
Making the Decision
Property management fees are a significant expense, but the right manager can more than justify their cost through higher occupancy, better rates, and time savings.
Consider management if:
- You live far from your property
- You value your time at more than the management fee would cost
- You lack expertise in pricing, marketing, or guest relations
- Your property requires frequent attention
Consider self-management if:
- You live nearby and enjoy hospitality
- You have flexible time to handle guest needs
- Your property is simple with few maintenance needs
- You’re comfortable with the technology and platforms
The fee you pay matters less than the net return you receive. A manager charging 25% who generates $80,000 in revenue delivers more value than one charging 18% who generates $50,000.
Need help evaluating whether professional management makes sense for your property? Contact us for a no-obligation revenue projection and fee comparison.
