You’re eager to start making rental income from your cabin! But first, consider what managing a rental property costs you. Let’s look at two ways to run your vacation rental.
Managing your own rental property
If you choose to manage your rental property yourself, expect costs including–but not limited to–these:
- Credit card fees. Landlords pay processing fees of around 2.5 percent to 3 percent of each transaction.
- CLEANING. The nationwide average cleaning costs for a vacation rental depend on the rental’s size. Services for a one-bedroom property average $75 per cleaning and go up to an average of $135 for a three-bedroom property. Unless you have more than one rental property in Gatlinburg, you won’t be able to take advantage of discounts on cleaning at multiple properties.
- Maintenance. Budget for regular maintenance like HVAC checkups, driveway maintenance, and landscaping. Your cabin might require hot tub cleaning, deck upkeep, fire pit maintenance, or pool cleaning. If you’re managing solo, you’ll have to deal with any repair emergencies. Set aside 1 percent of the value of your cabin as an annual maintenance fund.
Working with a professional property management company
If you don’t want to handle emergencies or daily details, hire a property manager. What costs should you expect? Management fees for vacation rentals can vary, depending on the property and the services you’re receiving.
Nationwide, vacation rental management fees vary from 10 percent of the property’s monthly rental income to 50 percent. Most management companies charge in the 20 percent to 40 percent range.
Ask Gatlinburg property management companies how much their services will cost and how their fees are structured. Fee structures affect how much of your rental income you keep.
- Percentage. The management company takes a percentage of your cabin’s monthly revenues.
- Flat fee. The management company charges a set fee to manage your property over a specific period. Managers may calculate flat fees based on the rental location, size, property type, and management services provided. You pay the same cost no matter how many bookings your property has in a month.
- Guaranteed income. The management company takes whatever rental income is left after paying the owner a fixed amount each month. This can be less lucrative for owners in popular tourist destinations because higher occupancy doesn’t necessarily mean more money for the owner.
To learn more about how to choose and pay for professional property management, contact us today.