Why Choosing a Cheaper Vacation Rental Manager Can Cost You More
Growing up, my dad had a saying, “The cheap man always pays more.”
I’d hear him grumble those words after he’d just hired a particular contractor to save a few dollars, only to find himself angry at the low quality of work. Or after he’d bought a discounted item that broke the first time it was used.
“The cheap man always pays more” became a mantra. My siblings even made Dad a sign for his office wall one Christmas.
The same is true when it comes to comparing vacation rental management options.
It’s natural to first look at the commission percentage. If you see a company charges 25% and another charges 15%, it’s easy to assume you’ll save an extra 10% by choosing the lower commission option.
But there’s a major problem with that math:
It assumes your revenue will stay the same, no matter who manages your property.
In reality, your short-term rental manager heavily influences your revenue, guest experience, reviews, visibility, maintenance standards, and long-term success on booking platforms.
Not all management is created equal. And when you choose a cheaper manager, or choose to self-manage, you’re likely leaving money on the table.
First, How Do Vacation Rental Management Fees Work?
If you’re newer to short term rentals, management companies charge a commission percentage of the revenue they generate for your property. Those percentages vary based on the level of service, the market, and the experience level of the company. Generally, percentages can range anywhere from 10% to 50% in some markets.
Many owners assume a lower percentage is automatically the better deal for them. But that often doesn’t tell the whole story. A lower commission company may also have:
hidden fees
maintenance markups
onboarding costs
outsourced operations
limited owner support
poor customer service
inexperience or even worse, apathy
So before comparing percentages, make sure you’re actually comparing apples to apples.
The Biggest Mistake Homeowners Make
Most owners compare management fees as if the revenue side of the equation is fixed.
It’s not.
The difference between an experienced revenue-focused management company and a lower-cost operator can easily mean tens of thousands of dollars annually.
Let’s look at how this breaks down:
As you see in the examples above, even with the higher commission percentage, the owner nets $21,000 more.
That’s why commission percentage alone can be misleading.
The real question is:
What is your manager helping your property produce overall?
Experience Matters More Than Most Owners Realize
Businesses and individuals offering extremely low commissions are often:
Large, high-volume companies where your home is just another number for nominal management
OR
Inexperienced operators still learning how to properly price, market, and manage properties
Both can hurt your long-term revenue and guest experience.
Pricing is NOT “set it and forget it.” A strong manager will actively monitor and strategize your pricing around:
market trends
booking pace
listing visibility
Airbnb insights
guest behavior
pricing software
calendar management
Different property types require different strategies. Marketing and pricing a ski cabin is different from marketing and pricing a downtown luxury condo. A 10 bedroom historic home in Hot Springs, VA is much different than a waterfront lake house in Ohio.
What worked six months ago may not work today. And what works on one home doesn’t mean it will work on another.
An experienced management company knows how to build successful strategies around the property, the market, and the owner’s goals. They’re motivated to bring you revenue because they don’t make money unless you do.
Revenue is a Byproduct of Excellence
Revenue matters. But many managers, both small and large, are focused on scaling their businesses too fast. They often seek to build their portfolio of properties above offering excellence in the guest experience.
But successful management is measured in and rooted deeply in hospitality excellence.
Guests notice it. Reviews reflect it. Booking platforms reward it.
With excellent hospitality, your property will be seen more, booked more, and ultimately make more. Revenue follows as a byproduct.
Look for a management company that prioritizes:
guest experience
owner relationships
property care
communication
safety
operational excellence
fast response times
continuing education within the industry
The Risks of Choosing the Wrong Manager
Short term rental management isn’t just answering guest questions and handling cleanings. What happens when:
reviews start slipping?
a listing gets buried in search rankings?
guest damages occur?
there’s a platform dispute?
Airbnb policy issues arise?
safety concerns emerge?
Does the company managing your largest asset know how to handle those situations well? Do you, as a homeowner, know exactly how to navigate these issues?
Experience becomes valuable very quickly when things go wrong.
Questions Every Homeowner Should Ask Before Hiring
If you’re considering another management company (or are considering self-managing), here are some important questions to ask:
What revenue management tools do you use?
Who handles the pricing, and how often do you manually monitor and adjust?
What training, certifications, or continuing education do you have within the industry?
How often do you monitor listing performance and market data, and how do you optimize conversion rates?
What is your calendar management strategy?
What happens when guest issues escalate, and what processes are in place to prevent them?
What specific strategy would you use for my property?
These questions matter far more than commission percentage alone.
The Cheap Man Always Pays the Most
My dad was right. You get what you pay for.
If you’re considering professional management for your property, we’d love to have a conversation about whether we might be the right fit. (You can start the process here.) Maybe we’re not the cheapest management company you can find. That’s okay. We are confident in the value we bring to our homeowners and guests. Our reviews speak for themselves.
You can be confident we care about protecting your asset, creating exceptional guest experiences, and actively building long-term performance over time.
When that’s done well, the value of experienced management far outweighs a small difference in a commission percentage.
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