As a homeowner with a short-term rental property listed on popular platforms like Airbnb, managing your rental income can be a challenge. There are many factors to consider, from nightly rates to cleaning fees to platform service fees. That’s why revenue management is an essential aspect of short-term rental property management, and why Prowess Property Management Inc. is here to help.
Let’s take a closer look at the revenue management process for short-term rental properties, using the sample computations provided. As the computations show, short-term rental platforms like Airbnb charge a nightly rate or base price, plus a cleaning fee and a platform service fee. These fees are deducted from the reservation cost, and the remaining amount is paid out to the homeowner within 7 business days after the guest checks out.
For example, let’s say the nightly rate for your property is $100, with a cleaning fee of $50. The platform service fee is usually around 3%, which in this case amounts to $4.50. After deducting the service fee, the platform will remit $145.50 to the homeowner for each successful reservation.
But that’s not the end of the revenue management process. Prowess Property Management Inc. understands that commission and deductions are also part of the equation. As the homeowner, you’re entitled to your share of the rental income, minus any commission and deductions.
Using the sample computations provided, let’s say the nightly rate for your property is $100, with a cleaning fee of $50. After deducting the platform service fee of $4.50, the nightly rate is recalculated to $94.50. From there, Prowess calculates its commission of 12%, which amounts to $11.34. This leaves a sub total of $83.16, to which the cleaning fee of $50 is added. The total amount of $133.16 is then considered the homeowner’s payout for the reservation.
It’s worth noting that revenue management doesn’t end with payout collection and commission calculation. At Prowess Property Management Inc., we understand the importance of transparency and accountability for rental income. That’s why we provide revenue reports to homeowners every first week of the month. These reports show a breakdown of rental income, including platform payout, commission, deductions, and homeowner payout. They provide a clear picture of your rental income and help you make informed decisions about your short-term rental property.
In conclusion, revenue management is an important aspect of short-term rental property management. Prowess Property Management Inc. understands the complexities involved in managing rental income, and we provide a range of services to help homeowners maximize their rental income while minimizing their workload and stress. Contact us today to learn more about our revenue management services and how we can help you succeed in the short-term rental market.