Post by High Priestess on May 27, 2016 5:29:34 GMT
Andy shared on Airbnb Products and Updates
www.airbnb.com/groups/content/content-100504
fee sharing
What's the typical fee sharing for having someone host your property on Airbnb?
15 comments
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Carrie
Carriea year ago
You mean have someone else host on your property? As in, do the cleaning/checking in/checking out in your stead?
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Andy
Andya year ago
i mean have someone do the online listing, promotion, filtering and emailing guests
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Carrie
Carriea year ago
I'd probably think 50% is fair, but you'll have to see what is customary in your area.
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Andy
Andya year ago
Thanks Carrie
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Deborah
Deboraha year ago
I wouldn't go as high as 50%....I think the property owner has to get a sizeable chunk just for being the property owner ( I would say at least 75%) and then there is cleaning to do, and maintenance, and check in and check out with guests. So, for someone just doing the listing and emailing guests I would think about 10-15% would be generous.
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Carrie
Carriea year ago
I assumed the property manager was doing all the cleaning, checking in, checking out, etc. Basically, all the day to day work of hosting minus the property owning.
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Deborah
Deboraha year ago
Even if the host is doing all the work, you would have to figure in the expenses simply associated with owning the property itself, and the total profit one might obtain. Given the very large expenses associated with simply owning a property, and the owner's expectation to receive a profit, I don't think paying someone 50% of total income earned is feasible.
For instance, say the property is a 2 bedroom house, which is listed for $200 a night. Say that the average income from this year-round on Airbnb is $ 4800 a month, which would be 80% occupancy rate. (That might be a higher occupancy rate than is realistic in some areas -- it depends) Say that the mortgage is $2000 a month, and the property tax $500 a month, and the home insurance $175 a month. Maintenance and repairs come to $300 a month, and furnishings and linens come to $75 a month. So, the total expenses are $3050 a month, meaning there is a profit of $1750 per month.
NOw, if the agreement is to pay the property manager/host 50% of the fees earned, then the property manager/host would get $2400 per month, which is significantly higher than the total profit. THe property owner would then be operating at a loss of $650 per month, while the property manager/host would have an income the equivalent of a full time job. No property owner in their right mind would accept such a deal.
Perhaps if the property manager is able to work the property so that it achieves an enormous profit, say in the range of $10,000 a month (if that were even possible!), then the owner might agree to 50% of the total fees...but a better deal for the property owner, would be to offer the property manager a % of the total PROFIT, not the total FEES. Otherwise, the owner is losing out big time. Even if the owner offered the property manager only 10-15% of total fees, that might be too much if the income is too small. To push the property manager/host to be responsible, they should get a percentage of total profits, and should be required to produce a certain minimum profit.
Reply Like 2 replies
Deborah
Deboraha year ago
And I forgot to add utilities expenses -- which would be at least $250-300 a month, more in colder areas....
Liz and Harry
Liz and Harrya year ago
Great summary. If you don't own the property and don't pay some or all of the utilities (not to mention insurance) the profits are much higher. It is much more expensive to be a homeowner when compared to a renter who is subletting. Additionally, the host is getting a 1099 for the entire take, and granted the costs of paying the assistant can be deducted, it can still impact their income bracket. If it turns out to be a significant cost to the host, do you issue them a 1099? Liz
Carrie
Carriea year ago
Deborah - I may have underestimated expenses - but the expenses you list are about 4x mine - my mortgage is $650/month, property tax is about $1,500/year, linens/furniture is about $50/year, etc!
Reply Like
Deborah
Deboraha year ago
THese things vary a lot. In my area, mortgage for a 2 bedroom house can vary from $1500 to $3500, but isn't $650 unless one bought 20 years ago. Property tax in my area is (phone number hidden) per year for 2 bedroom houses (again, unless one bought 30 years ago...). So, this just goes to suggest that it is difficult to generalize on these issues -- and the best arrangement with a property manager would be one that is crafted by sitting down and looking at precise details and costs.
Reply Like 1 like
Andy
Andya year ago
Eye opening discussion. I had really not focused on profits. The percent I had in mind was at least 15 and at the most 30%. 15% for a high-end property and perhaps not dealing with the guests and 30% for a property where I am doing it all. Many of my hosts actually live in the property so everything they get from my work is gravy.
Reply Like
Carrie
Carriea year ago
Ah, I assumed you'd be washing the linens, cleaning the house, making the bookings, interacting with the guest, giving them restaurant suggestions - all those things I do on a daily basis.
Reply Like
Andy
Andya year ago
Plan to have both options the entire enchilada or the scaled-down version where I do everything but the delivery of the property and the cleaning
Reply Like
Deborah
Deboraha year ago
I would think it would depend a lot on the individual host or property owner. Some of them might fall for a slick presentation and be willing to pay more than they should....some might be resistant to paying something quite reasonable.
THere are several approaches one could take. One would be to ask a percentage of total fees, which I think you would have to be a better salesperson to pull off, as a property owner is taking a risk paying you to do something if they aren't even guaranteed a profit. Another approach would be a percentage of total profits.
WIthin that second category, there may also be more than one way of assessing what is the "profit". What I discussed above was more or less a list of actual direct expenses that a property owner may have each month -- the numbers of course would vary widely from place to place and by type of property. But everyone has some actual direct monthly expenses for property. So, one way of calculating profits would be to list actual Airbnb income, and each month's actual expenses.
However, there is another way of looking at profit, and that is a bit more aligned with what we do in our federal taxes when we take into account depreciation. Suppose the property owner is providing a property that he already owns outright, no mortgage, and which is all furnished, so there is no furniture or linens expense. Now if I were that property owner, I would not be so happy if someone was telling me that all of this enormous amount of money that I've already put into paying off the mortgage and furnishing the entire house, is just to be set aside, and we are only going to work with "actual" expenses. I would feel that I was not getting credited for expenses I had in the past, without which,this unit would not be up and ready for renting today. So, one way to account for those things would be to consider the historical expenses which have been invested, and to figure them in in some form as a deduction from total monthly profit. This would be easier to do with the furnishings -- just add up the total amount of cost of furnishings in the unit to be rented, and decide on a portion of that total to be deducted from total profits each month.
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Myriem
Myriema year ago
Hello Andy,
EasyGuests is present in NYC, Paris and soon in London, and offer to host your property, (Booking, Price Optimization with Everbooked Algorithm updated everyday, key exchange, Cleaning and supply of Sheets and towels) for 18%.
If you are not in NYC, Paris and London, the option EasyGuests Virtual (Price Optimization Daily, Booking and arranging cleaning and key exchange with a local provider) for 2%. I hope that helps.
Check EasyGuests dot com
Reply Like
Stephanie and Steven
Stephanie and Stevena year ago
If you're asking people to clean and host, I think you owe them at least the whole cleaning fee plus a percentage. Especially if you expect them to welcome strangers into what is, rented or not, their home, whenever you choose to do so. Personally, I wouldn't go for that at all. I've been a renter and that just sounds unfair and unpleasant to me. Unless they stay in your property as your caretaker - then, it's part of the deal.
www.airbnb.com/groups/content/content-100504
fee sharing
What's the typical fee sharing for having someone host your property on Airbnb?
15 comments
Following
Like
Carrie
Carriea year ago
You mean have someone else host on your property? As in, do the cleaning/checking in/checking out in your stead?
Reply Like
Andy
Andya year ago
i mean have someone do the online listing, promotion, filtering and emailing guests
Reply Like
Carrie
Carriea year ago
I'd probably think 50% is fair, but you'll have to see what is customary in your area.
Reply Like
Andy
Andya year ago
Thanks Carrie
Reply Like
Deborah
Deboraha year ago
I wouldn't go as high as 50%....I think the property owner has to get a sizeable chunk just for being the property owner ( I would say at least 75%) and then there is cleaning to do, and maintenance, and check in and check out with guests. So, for someone just doing the listing and emailing guests I would think about 10-15% would be generous.
Reply Like
Carrie
Carriea year ago
I assumed the property manager was doing all the cleaning, checking in, checking out, etc. Basically, all the day to day work of hosting minus the property owning.
Reply Like
Deborah
Deboraha year ago
Even if the host is doing all the work, you would have to figure in the expenses simply associated with owning the property itself, and the total profit one might obtain. Given the very large expenses associated with simply owning a property, and the owner's expectation to receive a profit, I don't think paying someone 50% of total income earned is feasible.
For instance, say the property is a 2 bedroom house, which is listed for $200 a night. Say that the average income from this year-round on Airbnb is $ 4800 a month, which would be 80% occupancy rate. (That might be a higher occupancy rate than is realistic in some areas -- it depends) Say that the mortgage is $2000 a month, and the property tax $500 a month, and the home insurance $175 a month. Maintenance and repairs come to $300 a month, and furnishings and linens come to $75 a month. So, the total expenses are $3050 a month, meaning there is a profit of $1750 per month.
NOw, if the agreement is to pay the property manager/host 50% of the fees earned, then the property manager/host would get $2400 per month, which is significantly higher than the total profit. THe property owner would then be operating at a loss of $650 per month, while the property manager/host would have an income the equivalent of a full time job. No property owner in their right mind would accept such a deal.
Perhaps if the property manager is able to work the property so that it achieves an enormous profit, say in the range of $10,000 a month (if that were even possible!), then the owner might agree to 50% of the total fees...but a better deal for the property owner, would be to offer the property manager a % of the total PROFIT, not the total FEES. Otherwise, the owner is losing out big time. Even if the owner offered the property manager only 10-15% of total fees, that might be too much if the income is too small. To push the property manager/host to be responsible, they should get a percentage of total profits, and should be required to produce a certain minimum profit.
Reply Like 2 replies
Deborah
Deboraha year ago
And I forgot to add utilities expenses -- which would be at least $250-300 a month, more in colder areas....
Liz and Harry
Liz and Harrya year ago
Great summary. If you don't own the property and don't pay some or all of the utilities (not to mention insurance) the profits are much higher. It is much more expensive to be a homeowner when compared to a renter who is subletting. Additionally, the host is getting a 1099 for the entire take, and granted the costs of paying the assistant can be deducted, it can still impact their income bracket. If it turns out to be a significant cost to the host, do you issue them a 1099? Liz
Carrie
Carriea year ago
Deborah - I may have underestimated expenses - but the expenses you list are about 4x mine - my mortgage is $650/month, property tax is about $1,500/year, linens/furniture is about $50/year, etc!
Reply Like
Deborah
Deboraha year ago
THese things vary a lot. In my area, mortgage for a 2 bedroom house can vary from $1500 to $3500, but isn't $650 unless one bought 20 years ago. Property tax in my area is (phone number hidden) per year for 2 bedroom houses (again, unless one bought 30 years ago...). So, this just goes to suggest that it is difficult to generalize on these issues -- and the best arrangement with a property manager would be one that is crafted by sitting down and looking at precise details and costs.
Reply Like 1 like
Andy
Andya year ago
Eye opening discussion. I had really not focused on profits. The percent I had in mind was at least 15 and at the most 30%. 15% for a high-end property and perhaps not dealing with the guests and 30% for a property where I am doing it all. Many of my hosts actually live in the property so everything they get from my work is gravy.
Reply Like
Carrie
Carriea year ago
Ah, I assumed you'd be washing the linens, cleaning the house, making the bookings, interacting with the guest, giving them restaurant suggestions - all those things I do on a daily basis.
Reply Like
Andy
Andya year ago
Plan to have both options the entire enchilada or the scaled-down version where I do everything but the delivery of the property and the cleaning
Reply Like
Deborah
Deboraha year ago
I would think it would depend a lot on the individual host or property owner. Some of them might fall for a slick presentation and be willing to pay more than they should....some might be resistant to paying something quite reasonable.
THere are several approaches one could take. One would be to ask a percentage of total fees, which I think you would have to be a better salesperson to pull off, as a property owner is taking a risk paying you to do something if they aren't even guaranteed a profit. Another approach would be a percentage of total profits.
WIthin that second category, there may also be more than one way of assessing what is the "profit". What I discussed above was more or less a list of actual direct expenses that a property owner may have each month -- the numbers of course would vary widely from place to place and by type of property. But everyone has some actual direct monthly expenses for property. So, one way of calculating profits would be to list actual Airbnb income, and each month's actual expenses.
However, there is another way of looking at profit, and that is a bit more aligned with what we do in our federal taxes when we take into account depreciation. Suppose the property owner is providing a property that he already owns outright, no mortgage, and which is all furnished, so there is no furniture or linens expense. Now if I were that property owner, I would not be so happy if someone was telling me that all of this enormous amount of money that I've already put into paying off the mortgage and furnishing the entire house, is just to be set aside, and we are only going to work with "actual" expenses. I would feel that I was not getting credited for expenses I had in the past, without which,this unit would not be up and ready for renting today. So, one way to account for those things would be to consider the historical expenses which have been invested, and to figure them in in some form as a deduction from total monthly profit. This would be easier to do with the furnishings -- just add up the total amount of cost of furnishings in the unit to be rented, and decide on a portion of that total to be deducted from total profits each month.
Reply Like
Myriem
Myriema year ago
Hello Andy,
EasyGuests is present in NYC, Paris and soon in London, and offer to host your property, (Booking, Price Optimization with Everbooked Algorithm updated everyday, key exchange, Cleaning and supply of Sheets and towels) for 18%.
If you are not in NYC, Paris and London, the option EasyGuests Virtual (Price Optimization Daily, Booking and arranging cleaning and key exchange with a local provider) for 2%. I hope that helps.
Check EasyGuests dot com
Reply Like
Stephanie and Steven
Stephanie and Stevena year ago
If you're asking people to clean and host, I think you owe them at least the whole cleaning fee plus a percentage. Especially if you expect them to welcome strangers into what is, rented or not, their home, whenever you choose to do so. Personally, I wouldn't go for that at all. I've been a renter and that just sounds unfair and unpleasant to me. Unless they stay in your property as your caretaker - then, it's part of the deal.