The Airbnb management industry has experienced global growth over the past few years as more real estate owners assess vacation rentals as an alternative to traditional long term leases. One of the biggest differences between renting to a tenant compared to working with a vacation rental management company is the type of contract that is signed. When renting to a traditional tenant, the owner signs paperwork that is generally based on a standardized local state tenancy agreement. In the other scenario, when working with a vacation rental manager each service will have a unique airbnb property management agreement that’s specific to their company.
While there are no standardized terms in vacation rental management templates, there are certain aspects that are consistent across all agreements. For these standardized terms, whether you are looking in Florida, California, Australia, or the United Kingdom – managers all over the world tend to include them in their management agreements. When comparing different companies, you can always ask for a sample vacation rental property management agreement to try to understand the differences between the services.
Airbnb Management Fees
An Airbnb property management agreement should clearly display the amount of commission the property manager is charging. Airbnb management Fees can vary significantly depending on the services that are being offered as well as the quality of the property. They usually start as low as ten percent and can go as high as thirty five percent in some markets for certain services. For the most part, management companies generally charge closer to fifteen to twenty five percent for a full service solution. While the management fee is an important deciding factor for owners, it’s important to understand an Airbnb management company’s service capabilities and ability to generate revenue. Revenue generation is based on dynamic pricing and minimum stay optimization, and a strong understanding of market forces can allow a management company to earn 20-35% more for a property than competitors. Knowing the approach to revenue management is as important as understanding the fee structure in the Airbnb management agreement.
Full Management Services
Any vacation rental management agreement should outline the scope of services that are being offered by the company. The scope of services in the agreement will likely involve some combination of online and in person services. The online services generally include listing management, multi-channel marketing, guest communication, screening assistance, and dynamic pricing. The ground services generally include cleaning coordination, restock, and property management. The scope of services can expand beyond this, but these are the most common for management companies. When signing an Airbnb management agreement you should learn more about what the company is and isn’t responsible for managing.
Termination Provision
Every Airbnb management agreement should have a clearly defined termination provisions. There are many reasons you may need to terminate a vacation rental management agreement, and most aren’t even related to being satisfied with the service quality. You may need to sell the property or decide to move in to the property for example. Ideally the management agreement has a termination clause that allows for maximum flexibility and minimal penalties for terminating. The best Airbnb management companies are relatively flexible as they know their service quality is good and want to provide flexibility for owners whose plans change.