VRM Costs and Returns
How Much Does Vacation Rental Management Cost?
TLDR:
The typical full-service vacation rental management company charges ~35-45% of gross billings for their services, including fees charged directly to owners and extras like booking and cleaning fees “paid” by guests but ultimately born by owners.
Lighter-touch management companies like Evolve charge ~20%.
Management companies also charge a mark-up of 20-35% on home maintenance services performed by third-party contractors they oversee.
Vacation rental management companies (“VRMs”) handle all the logistics and marketing activities required to operate a property as a short-term rental. The benefits of outsourcing STR management to a VRM are clear in terms of owner convenience. By outsourcing to VMRs, owners also outsource all the headaches related to communicating with guests, handling late-night emergencies, soliciting positive reviews online, etc.
The question then is “how much does it cost to use a short-term rental manager?” and “how do I decide if a VRM is worth it?”
One piece of good news: almost all VRMs have performance-based pricing models, where they earn a percentage of gross billings but owners have no guaranteed or upfront commitment.
Another piece of good news: while VRMs nominally have customers sign-up for annual programs, most allow for no-fee cancellation with 60-90 day notice.
So if you decide you want to try working with a vacation rental manager but it doesn’t work out, you can reverse the decision and start self-managing or change to another provider.
How do decide if it’s worth hiring a VMR?
Estimate how many hours you spend—or would spend—marketing and managing the property on your own
Ask prospective VRMs how much they typically increase utilization and/or Average Daily Rates for their clients and what you can expect
Confirm the full pricing structure for VRMs; ask about all fees from commissions charged to owners, guest fees, laundry fees and mark-ups on any third-party contractor work.
Use our free calculator to assess the return of hiring a VRM v. managing in-house
Try our free VRM v. self-manage calculator.