The Price is Right: An owner’s guide to short term property management fees

Property Providers’ market-leading boutique short-term rental property management service delivers flexibility, convenience and peace of mind.  Yet many owners and investors question why short-term rental agency’s commissions are higher than standard agency commissions. This is particularly common if owners are comparing real estate agencies that specialise in short-term rentals vs traditional long-term leasing.

This article benchmarks global short-term rental commissions and explains why they are worth the investment.

Property management fees & charges explained

Property management fees are a crucial investment to pay for the costs of dedicated specialists to optimise the owner’s earnings from rentals and maintain properties to meet guest expectations.

Unlike traditional leasing, short-term rental accommodation needs ongoing investment in 24/7 guest services, premium housekeeping and deep cleaning services, short-term rental accommodation regulation, repairs and maintenance of furniture and appliances, plus standout photography to market the property across competitive advertising channels like Airbnb and VRBO.

These additional services are not a usual part of traditional rental agencies, helping to maintain your property, drive higher occupancy and maximise the owner’s return.

A full-service agency, like Property Providers, includes a range of property management services:

• Marketing services in specialist channels to advertise the property for rent
• Acquiring, vetting and managing relationships with guests
• Property inspection services
• Negotiating with suppliers, tradespeople, tenants and guests
• Arranging repairs and maintenance or property upgrades to maximise an owner’s investment
• Managing financial accounts and monthly reporting

Plus, unlike pedestrian agencies, short-term rental commission includes:

• Property ‘guest ready’ preparation advice and onboarding
• Administration of short-term rental registration for STRA compliance
• Fire safety compliance, installing smoke alarms, fire extinguishers and evacuation maps
• Arranging replacement furniture, fittings, appliances and other items from new frypans to fixing the wi-fi
• Arranging cleaning for each guest’s departure and routine deep cleaning
• Managing security deposits and guest charges for extra cleaning, breakages and repairs
• Great service to ensure happy guests, excellent reviews and more bookings!

Global Property Management Fees Benchmark

The cost of premium hospitality-grade property management can vary. Short-term property management fees can range from 10 to 50% and are differentiated by the services offered and market.

A recent Bain & Company analysis broke down typical vacation rental management commission structures, noting a full-service agency usually charges up to 30% of the booking. As services offered decreased so did the commission, with marketing channels or aggregators taking up to 15% of the commission solely for advertising the property.

In the United States, a Rented.com study, which aggregated data from over 1,000 managed properties, revealed that full-service management fees, covering everything from booking to emergency maintenance, typically range up to 40%, with the average commission rate being 28%. Fees vary depending on location, with urban rentals generally lower (20-25%) and destination (Ski/Beach) rentals higher (30-35%).

Some companies, like Property Providers, also offer a booking-only option or Booking Agent services at lower rates (10-15%), handling only marketing and bookings without full-service management.

Additional fees & charges – know what you pay for

No one likes hidden fees. Property Providers itemise all fees/charges, passing on maintenance and repair bills to owners without markup. Unlike other traditional rental agencies, we do not charge administrative costs per bill or lease renewal costs.

Common short-term rental fees can include:

• Booking management fees
• Housekeeping/hospitality standard cleaning fees
• 5-star hotel-grade linen and bed-making fees for each booking
• Channel management costs
• Advertising packages
• Repairs and maintenance charges
• Annual short-term accommodation registration fees are required for NSW STRA compliance
• Smoke alarms, emergency exit plans and fire extinguishers for guest safety
• Merchant fees
• Monthly statement fees

The cost of short-term rentals is not for everyone

If the complexity of short-term rental fees doesn’t add up for you, Property Providers offers different models to suit a variety of owners’ needs and can easily switch you from short-term rentals to long-term leasing or to a booking agency agreement for a significantly lower cost.

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Property Providers is a premium property management agency. We help people live better in fully furnished executive rentals and premium properties across Sydney’s lower North shore and Northern beaches, from North Sydney and Northbridge to Mosman and Manly.

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