If you own a vacation rental property in Miami, you know the area is always booming with tourists. So much so that Miami ranks as the second most visited city in the United States, only behind New York City.
Because of the high tourist tourist-to-local ratio, rental property owners can make big bucks. With so many other vacation properties to compete with, you need to stand out with short-term rental management, but it does come at a price.
Keep reading to learn about the average vacation rental management fees.
Short-Term Rental Management Fees
Short-term rental management fees refer to the fees owners pay to a property manager to cover the cost of management services.
Short-term property management services might include:
- Guest communication
- Onsite maintenance
- Booking management
Vacation property owners who don't want to manage their investments on their own will pay monthly payments to property management companies.
Average Fees Explained
Because there are different property management companies out there, it can be hard to determine the exact industry average for management fees.
The average cost will depend on the type of property, property location, and how many units need to be managed.
Some trends can help vacation property owners know what to expect. For vacation rentals, the typical range of property management fees is anywhere between 10 and 50% of the monthly rental income.
Property managers that offer full-service management are going to charge more than partial management companies.
Full-service management is the best option for out-of-town investors who need someone to manage all of the property duties.
Partial managers can help with certain tasks like customer service or marketing while owners still handle day-to-day operations.
Common Fee Structures
A property management company can choose to charge for its services through its preferred fee structure. The three common models that property managers use are:
- Guaranteed income model
- Fixed-rate model
- Commission model
If you want to guarantee you are bringing in passive income all year round, the guaranteed income model might be right for you.
This structure involves the property manager paying a fixed monthly rate to the owner, even if the property has little to no bookings. The catch is that your income will be the same regardless if it's a busy vacation season or not.
Any extra income that is earned is paid to the management company.
You and your property manager can agree on a fixed, flat fee that the manager receives every month. In the fixed-rate model, the amount stays the same for the property manager.
This is an ideal arrangement if you want to pocket all of the profits made during peak vacation season.
The commission model works on a percentage-based level in which the rental owner will pay the property manager monthly. This is a popular structure because the fees are based on the rental income made that month.
Increase Your Profits With Short-Term Rental Management
Although short-term rental management companies require an initial investment, it's an investment many owners are more than happy to make.
A professional property manager can help you increase your profits and ensure both of you are getting paid.
If hosting guests and handling day-to-day management tasks isn't right for you, PMI Magic City can take on these responsibilities! Our property management company helps vacation property owners like you. Contact us today to learn how.
