This guide reveals common rent-seeking practices, breaks down real examples like Vacasa, and shows how to protect your profits by asking the right questions and choosing a transparent property manager.
From Montana to the Outer Banks and Florida's Emerald Coast, no matter where your vacation rental is located, if you've decided to hand over management to professional property managers, there are a few things to consider before signing the deal. One of the most important is making sure the service doesn't come with hidden fees.
In the world of short-term rentals, property managers play a key role in maximizing your profits and simplifying your life as an owner. However, it's important to watch out for those who use hidden fees to boost their earnings.
At Real Joy, we've spent years managing properties right here in the Emerald Coast, and we know exactly what it takes to help them thrive. We're not shy about sharing what we've learned along the way! When you partner with us, you can rest easy knowing there are no hidden fees involved.
In this blog, I'll shed light on the rent-seeking practices of some property managers, with Vacasa as an example, and explain why it's important to look beyond commission rates to fully understand the fees involved.
TL'DR
- Understand Rent-Seeking: Learn how hidden fees and vague charges from property managers can erode your rental profits, and what you can do to spot and prevent them.
- Look Beyond Commission Rates: Why focusing only on commission rates misses the bigger picture. Explore how booking, cleaning, and maintenance fees impact your rental income.
- Booking Fees: Dig into the often-overlooked booking fees that chip away at profits. Understand how and where they show up, including real examples from the field.
- Monthly Maintenance Fee and Insurance Charges: See how flat maintenance fees and guest insurance charges can sneak up on your finances and what questions to ask to stay in control.
- Lack of Awareness: Many property owners overlook hidden fees in management contracts. Learn how to spot them early and ask the right questions from the start.
- Ensuring Transparency and Fairness: A look at why transparency is essential in property management and how it builds trust, improves communication, and protects your income.
Ready? Let's dive in!
1. Understand Rent-Seeking
Let's dig into the world of rent-seeking in property management. Think of it as a behind-the-scenes heist where profits disappear without much warning.
What Is Rent-Seeking?
Imagine this: you're feeling great about your investment property. Then out of nowhere, profits start slipping through the cracks. Enter rent-seeking—the practice of charging extra fees that do nothing to improve your property or your guest experience. These costs exist purely to boost someone else's bottom line.
How It Happens
Property managers sometimes sneak in hidden fees under vague labels. They may look like routine costs, but they chip away at your returns quietly. These might include:
- Maintenance markups
- General service charges
- Booking fees you didn't know existed
- Penalties for things that were never clearly explained
It's like discovering an extra passenger on your profit train, one who never bought a ticket.
What You Can Do About It
The first step is awareness. Before signing anything, read your agreement carefully. Scrutinize the fine print, ask direct questions, and make sure you know what each line item really means.
Once you're on board, keep communication open. Talk to your manager about every fee and make sure the terms are clear. Negotiate upfront. This is your property, your income, and your right to transparency.
Also, use tech to your advantage. Property management software and accounting tools can help you track your earnings. If something seems off, you'll catch it quickly.
The Case of Vacasa
Let's zoom in on Vacasa, one of the biggest names in the industry.
On paper, their standard commission rate looks like a manageable 20%. But look a little closer, and you'll find added fees that aren't always obvious at first glance.
One major example: a 12–14% booking fee is applied to all direct bookings made more than 60 days in advance. That's on top of the commission you're already paying. The result? Your revenue shrinks without a clear benefit in return.
Vacasa's strategy here is a textbook example of rent-seeking. These fees do not reflect added value; they're simply another way to increase their revenue, often at your expense.
Key Takeaways
2. Look Beyond Commission Rates
Choosing a property manager can feel a bit like shopping for a flight. The headline price might look great at first glance, but once you dig into the fine print, the real cost starts to appear.
Many property owners make the mistake of focusing only on the commission rate. But that's just one piece of the puzzle. The real story lies in the extra fees hiding in the background, and those can quietly eat away at your profits.
The Fees That Add Up Fast
Let's break it down:
- Booking Fees: These are often charged per reservation and can be tucked into the guest's bill or passed along to you. Over time, they add up and cut into your revenue.
- Cleaning Fees: Standard after every guest stay, cleaning fees can become costly if not clearly structured. If your manager adds a markup here, you might be paying more than you realize.
- Maintenance Fees: Yes, maintenance is necessary, but the pricing model matters. Some managers charge a flat fee, others a percentage. Others might surprise you with unexpected service call charges.
All of these add-ons can impact your rental income far more than a small difference in commission.
Ask the Right Questions
To avoid surprises, take a close look at the full fee structure before signing anything. Ask for a complete breakdown. Get specific.
- Are cleaning or maintenance fees marked up?
- Do you pay booking platform fees or does the manager?
- Are any of these charges variable?
- Will you see line-item reporting each month?
A good property manager will be transparent and willing to explain every line.
Key Takeaways
- The commission rate is just the starting point.
- Hidden fees like booking, cleaning, and maintenance can significantly reduce your income.
- Every fee, big or small, should be explained clearly before you sign.
- Look for managers who are open and transparent about how charges are calculated.
- Ask detailed questions and request a complete fee breakdown in writing.
- Understanding the full cost of management helps you protect your profits and avoid surprises.
3. Booking Fees: A Closer Look
Booking fees often fly under the radar, but they can make a serious dent in your bottom line.
What Are Booking Fees?
They're extra charges, often a percentage of the total booking, and not included in the commission rate. Think of them as a second slice of your revenue pie.
Why They Matter
- Often overlooked or buried in agreements.
- It can significantly reduce your actual income.
- Usually kicks in on top of the commission you're already paying.
Real Talk: One Owner's Experience
We spoke to an owner who found out their manager was charging a 14% booking fee on top of the standard commission. Result? A big chunk of revenue is gone before they even see the statement.
Why You Might Miss Them
- Hidden in fine print.
- Overshadowed by a "low" commission rate.
- Only show up when financial reports roll in.
What You Can Do
- Ask direct questions before signing anything.
- Request full breakdowns of all fees.
- Compare local standards so you know what's fair.
Vacasa's Booking Fees
In the case of Vacasa, their average commission rate in a specific area may be 20%. However, they also impose a booking fee ranging from 12-14% on all direct bookings made over 60 days in advance. This means that property owners working with Vacasa could potentially pay an average commission rate of 20% plus an additional booking fee of 12-14%. These fees can quickly eat into the profitability of your rental property and make a significant dent in your revenue.
4. Monthly Maintenance Fee and Insurance Charges: What to Watch For
Once you've looked past commission rates and booking fees, there's still more to the financial picture. Two fees in particular can quietly eat away at your profits if you're not paying attention: monthly maintenance fees and insurance charges.
Maintenance Fees: Fair or Fixed?
It's perfectly normal to pay for maintenance, especially if your manager is helping with repairs or ongoing upkeep. But fee structures vary.
Some property managers charge only when work is done. Others take a different approach, charging a fixed monthly maintenance fee, even if no services were provided that month. This can mean you're paying for work that never happened.
Don't assume this fee is harmless. It adds up quickly and can become a profit drain if it's not tied to real services. Always ask for clarity on how maintenance fees are calculated and what they cover.
Guest Insurance: Daily Charges That Add Up
Another sneaky fee to understand is guest insurance. Some property managers tack on daily insurance charges, which come right out of your rental income.
That means even during low seasons or short bookings, you could be losing money every single day. Some insurance charges are flat-rate, others vary by percentage, but both reduce your net earnings unless managed carefully.
What you can do
Ask questions. Be direct. Understand every fee before you sign. Property management should add value, not mystery.
Key Takeaways
- Maintenance fees should reflect actual work done, not just a flat monthly charge.
- Fixed monthly maintenance costs can quietly eat into your profit.
- Guest insurance fees are often charged daily and subtracted from your income.
- Understand how insurance fees are calculated and how much they'll cost over time.
- Always ask for transparent breakdowns of both maintenance and insurance charges.
- If a fee doesn't make sense, ask why it's there and what it covers.
5. Lack of Awareness: Don't Let Hidden Fees Catch You Off Guard
Stepping into the world of property management can feel exciting until you stumble into a maze of unexpected fees. Many owners jump in, hopeful about returns, only to discover charges hiding in the fine print.
And the tricky part? Most people only focus on commission rates and completely miss the hidden fees that quietly chip away at profits.
Know the Rules Before You Play
Think of it like joining a game where no one tells you the full set of rules. Suddenly, booking fees, maintenance charges, and vague "service" costs show up, and now you're playing catch-up with your bottom line.
But you're not powerless. Learning what to ask and what to look for gives you the upper hand.
Ask, Ask, Ask
Don't assume all the details are laid out. During your search for a property manager:
- Ask about every single fee.
- Request clear examples of past charges.
- Find out what's included in their commission and what's not.
- Push for transparency; this is a business partnership, not a guessing game.
Keep the Conversation Open
Transparency doesn't stop at onboarding. Your property manager should be someone you can talk to. Regular check-ins about performance, fees, and expenses keep everyone aligned and your profits protected.
Key Takeaways
- Commission rates are just one piece of the puzzle.
- Hidden fees like booking charges and maintenance add up quickly.
- Educate yourself before signing any agreements.
- Ask detailed questions and expect clear answers.
- Look for a property manager who's open and communicative.
- Transparency leads to trust and better returns on your rental.
6. Ensuring Transparency and Fairness in Property Management
Choosing the right property manager can make or break your rental success. It's not just about handing off the keys, it's about knowing exactly what you're getting in return.
The best property managers value transparency. That means:
- No sneaky booking fees.
- No confusing extra charges.
- No vague "admin" costs buried in the fine print. Just clear, upfront pricing that helps you see where your money is going.
A transparent manager lays it all out. Every cost, every service, every expectation. You're not left guessing, and that clarity builds trust from day one.
Even better? These managers invite questions. They want to walk you through their process, talk through your goals, and make sure you feel confident. It's a true partnership, not just a transaction.
At the end of the day, transparency is about more than numbers. It's about communication, shared priorities, and building something solid together.
Key Takeaways
- Pick a property manager who is upfront about all fees.
- Avoid services that charge booking fees or hide costs.
- Transparency helps you plan smarter and earn more.
- Good managers explain every detail and welcome questions.
- Open communication creates a stronger, more productive partnership.
- When you understand the full picture, you're set up for success.
Partner with US
Partnering with RealJoy means working with a property management team that's all about transparency, fairness, and helping you earn more. Unlike companies that sneak in extra charges, we keep things simple: no hidden fees, just a clear breakdown of what you're paying for and why.
It's all part of our commitment to giving you the full picture so you can make smart, confident decisions about your rental investment.