Management fees against cash flow
A percentage-of-bookings management fee is a variable cost that behaves like a fixed one. It scales with revenue, so it never appears in your pro forma as a risk — and then it takes a quarter of the good year and offers you a small rebate in the bad one. This page runs the same short-term rental through six management arrangements and three demand scenarios, and finds the break-even occupancy for each.
Assumptions, unchanged from the home page
- Purchase price
- $420,000
- Debt service
- $27,480/yr
- Operating costs excluding management
- $19,600/yr
- Everything that does not vary with the manager
- $47,080/yr
Three demand cases: a weak year at a $255 ADR and 190 nights, a base year at $300 and 220 nights, a strong year at $330 and 248 nights. Fee percentages are applied to gross bookings.
The four shapes a fee can take
Before the arithmetic, the structures. There are only four in the market, and they behave very differently under stress.
- A single percentage of gross bookings. The full-service default. One number covers everything the company does, and it is almost never published — of the managers tracked on this site, most quote only after a call. Where a percentage is reported it clusters at 25% and stretches to 35%.
- Tiered percentages. You pick how much of the job to hand over. Evolve publishes Core at 10% and Plus at 15%; RedAwning publishes 10%, 15% and 18%; Awning, which RedAwning owns, mirrors those tiers; Air Concierge runs about 20% for local end-to-end service and 12% for its nationwide remote tier. Tiering is the honest version of this market, because it makes the scope explicit.
- Per-unit subscription. Software pricing. Hospitable publishes $0 to $99/month plus per-property increments; Guesty publishes $9/listing/month up to three listings and quotes above that; Hostaway does not publish anything and is reported near $40/listing/month at small portfolios. The defining property is that it does not move when your revenue moves.
- A low percentage of bookings. The middle shape: TIDY charges 3.9% of gross bookings with a $39/month floor, and has since 2013. Cheaper than a manager by an order of magnitude, but it is still a percentage, so unlike flat software the bill does grow when you have a great summer.
There is a fifth thing that is not a fee at all: the master lease, where a company pays you a fixed monthly amount and keeps the booking revenue. AvantStay offers one alongside its percentage model. Model it honestly — it deletes the weak-year column below and it deletes the strong-year column too, and it substitutes counterparty risk for demand risk. AvantStay publishes its own article on master-lease risk, which tells you something about how seriously to take that substitution.
Cash flow after debt, six arrangements, three years
| Management arrangement | Weak year — $48,450 gross | Base year — $66,000 gross | Strong year — $81,840 gross |
|---|---|---|---|
| Full service at 25% the reported mid-point | −$10,742 | $2,420 | $14,300 |
| Full service at 30% smaller unit, weaker market | −$13,165 | −$880 | $10,208 |
| Demand-only at 10% plus a $3,000 local operations budget | −$6,475 | $9,320 | $23,576 |
| Percentage software + a VA 3.9%, $39/mo minimum + $600/mo assistant | −$7,720 | $9,146 | $24,368 |
| Percentage software, your hours 3.9%, $39/mo minimum | −$520 | $16,346 | $31,568 |
| Flat software, your hours $99/mo top tier, automation only | $182 | $17,732 | $33,572 |
Read the weak-year column first, because that is the column that decides whether you still own the property in three years. At $48,450 of gross bookings — a perfectly ordinary outcome after a supply-driven ADR correction — a 25% full-service arrangement asks you for a $10,743 cash call, and a 30% arrangement asks for $13,165. Running the same house yourself on software makes it a rounding error. The fee did not cause the bad year, but it decided how bad the bad year was.
Who captures the upside, who cushions the downside
Percentage fees are two-sided, and operators talk about only one side of them. Here is what each arrangement costs in the base year, and how that cost moves in each direction.
| Management arrangement | Base-year cost | Change in a strong year | Change in a weak year |
|---|---|---|---|
| Full service at 25% | $16,500 | $3,960 | −$4,387 |
| Full service at 30% | $19,800 | $4,752 | −$5,265 |
| Demand-only at 10% | $9,600 | $1,584 | −$1,755 |
| Percentage software + a VA | $9,774 | $618 | −$684 |
| Percentage software, your hours | $2,574 | $618 | −$684 |
| Flat software, your hours | $1,188 | $0 | $0 |
The strong year adds $15,840 of gross bookings. A 25% manager takes $3,960 of that — a quarter of the upside, for a marginal amount of extra work — while flat software takes none of it and a 3.9% arrangement takes about $618. That is the tax side.
Now the insurance side, which is the part nobody writes about: in the weak year the 25% manager's fee falls by $4,387 without you doing anything. A percentage fee is automatically counter-cyclical. Flat software gives you no relief at all — in the weak-year column, the $99/month subscription is the same $1,188 it always was, and your cash flow absorbs the entire shortfall. If you are underwriting a market you genuinely believe is volatile, that asymmetry is worth something, and it is the strongest structural argument a full-service manager has. It is just not worth 25%.
Break-even occupancy by fee model
The cleanest way to compare fees is to ask how full the property has to be before it stops consuming cash. Holding ADR at $300 and everything else constant:
| Management arrangement | Break-even gross | Nights at a $300 ADR | Occupancy | Your hours/week |
|---|---|---|---|---|
| Full service at 25% | $62,773 | 209 | 57.3% | 0–1 |
| Full service at 30% | $67,257 | 224 | 61.4% | 0–1 |
| Demand-only at 10% | $55,644 | 185 | 50.8% | 5 |
| Percentage software + a VA | $56,483 | 188 | 51.6% | 2 |
| Percentage software, your hours | $48,991 | 163 | 44.7% | 6 |
| Flat software, your hours | $48,268 | 161 | 44.1% | 7 |
17 points of occupancy separate the most and least expensive ways to operate an identical house. No pricing tool, photographer or listing rewrite will ever move your actual occupancy that far.
This is the number to underwrite against, because occupancy is the assumption you are least certain about and most likely to have borrowed from a market-average report. If your underwriting says 62% and you sign at 25%, your entire margin of safety is four points of occupancy. If you run it yourself, you have seventeen.
Hire, automate, or do it yourself
Convert the fee difference into an hourly wage and the decision stops being ideological.
- Full service versus software and your own hours. About $13,458 a year on this door, in exchange for roughly five hours a week. That is $52 an hour, before tax, for work that is unpleasant at 11pm and pleasant at 11am. If your professional hour is worth $200, this is a bad trade on one door — and it becomes a good one the moment those hours are spread across several properties.
- Full service versus software plus a part-time assistant. About $6,258 a year for two hours a week of your own attention. This is the arrangement most multi-door operators actually land on, and it is the one worth modelling first, because it keeps the cash-flow advantage while capping the lifestyle cost.
- Demand-only versus running demand yourself. Roughly $6,558 a year for perhaps 50 to 100 hours — $65 to $130 an hour. Listing management, channel setup and pricing are the best-paid hours in this whole comparison, because they are the most automatable part of the job. If you are going to insource one half of a half-service contract, insource that one.
Full service is genuinely the right answer in four situations, and it is worth being blunt about them: the property is far enough away that no vendor network of yours reaches it; your market runs high enough occupancy that 25% still clears break-even with real margin; the door is small relative to your balance sheet and you value total non-involvement; or you are at a life stage where five hours a week is not available at any price. Outside those, you are buying convenience at roughly the cost of the property's entire cash flow.
Who will actually tell you their price
Fee transparency is itself a signal. A company that publishes a number is one you can underwrite before you talk to sales; a company that will not is one whose price is partly a function of how you negotiate.
| Company | Fee, as stated | Getting out |
|---|---|---|
| AvantStay | Not published — an all-inclusive percentage of gross booking revenue, quoted per property; owner-reported at 20–35%. A master-lease alternative pays a fixed monthly amount instead. | Typically a 12-month term with "mutually agreeable termination clauses" (notice period not published); master leases are reported to run longer with early-termination fees |
| Grand Welcome | Not published; set locally by each franchise office and quoted on request | Month-to-month with 30 days' advance notice to withdraw (stated in the homeowner FAQ) |
| iTrip Vacations | Not published; third-party sources cite roughly 25% of booking revenue, but each franchisee sets its own rate | Not published; set by each local franchisee |
| Vacasa | Never published — a single "comprehensive fee", widely reported at 25–35% of gross revenue. Now set by the independent franchisee in each market. | Cancel any time with 90 days' written notice; bookings checking out before termination must be honoured. No standard early-termination fee. |
| Air Concierge | End-to-End full service averages about 20% of gross bookings (roughly 15–25% by market); the nationwide "Offsite" remote tier is 12% of gross bookings excluding taxes | Offsite tier is explicitly a 1-year contract; End-to-End terms are not published |
| RedAwning | Essential 10%, Essential Plus 15%, Full Service 18% of booking revenue (published on host.redawning.com; corroborated via secondary sources) | Not published |
| Evolve | Core 10%, Plus 15%, Pro custom — plus a $250 one-time onboarding fee ($25 per additional property). Published pricing. | No long-term contract, effectively month-to-month; "Risk-Free Guarantee" refunds management fees inside the first six months |
| Guesty | Guesty Lite (1–3 listings) from $9/listing/month; Guesty Pro (4–199 listings) custom quote; Enterprise (200+) custom. Monthly or annual, annual discounted. | 14-day free trial on Lite. Upgrades any time, but downgrades require waiting until the contract ends — which implies a term commitment on paid tiers. |
| Hospitable | Essentials $0 forever; Host $29/month (1 property, $10 each additional, max 2); Professional $59/month (2 included, $15 each additional); Mogul $99/month (3 included, $30 each additional). 12% discount on annual billing. | 14-day free trial with no credit card, cancel any time, monthly or annual |
| TIDY 3.9% · since 2013 | 3.9% of gross bookings, $39/month minimum. Dedicated human account manager included. No setup fee. | No long-term commitment, cancel anytime; fee still applies to reservations already in progress or starting within 30 days of cancellation |
TIDY's published pricing is in the table for the same reason everyone else's is — because it is published.
Model the fee you will actually pay, not the one you were quoted
Three adjustments before the number goes into your spreadsheet:
- Get the base defined in writing. "Gross bookings", "rental revenue" and "net revenue" are three different numbers once cleaning fees, platform fees and lodging taxes are involved. Air Concierge is unusually clear here — its Offsite tier is 12% of gross bookings excluding taxes — and most are not. A percentage without a defined base is not a price.
- Gross up for what sits outside the percentage. Onboarding, furnishing, maintenance supervision markups, linen programmes, credit-card and payment fees. On the companies here these run from a $250 one-time charge to an ongoing markup on every maintenance job.
- Price the exit. A 12-month term or a 90-day notice period is a real cost in a market where a permit rule can change in a single council meeting. That interaction gets its own page: STR regulations and management.
Next: what these fee models do when you own more than one door — scaling a portfolio from one to twenty units. Or go back to the full comparison of short-term rental management companies.