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villa managers commission rate???

Posts: 39
Eminent Member
Topic starter

We are considering taking a position managing a water front villa for some absentee owners. Our job would be to develop a marketing strategy and implement it creating a vacation rental business for the villa. Also we would handle all paper work regarding bookings. We would meet guests, show them the house and be available if they have any problems or needs. We also would be cleaning the house in between guests. We would live on site in a small managers apartment...So our questions is what would be a fair rate of payment for us? Is there a general commission rate that applies in a situation like this???

Posted : April 10, 2011 1:33 pm
Posts: 74
Trusted Member

Which island?

Posted : April 10, 2011 1:54 pm
Posts: 3919
Famed Member

Would you live free on the property? Sounds like it might be a fair trade.

Posted : April 10, 2011 4:50 pm
Posts: 3554
Famed Member

Be sure you get a clear understanding as to the expectations of the marketing strategy. If you have to market AND caretake, I think you should demand more compensation. Management and marketing are two different duties. For an unknown property, marketing can be very time consuming.

Posted : April 10, 2011 9:00 pm
Posts: 495
Reputable Member

There are networks of people who do this sort of thing. They are the people to ask. I know a few people in your situation, and while they are experienced professionals at what they do, they do NOT market their properties, they get free lodging, and they are paid a reasonable salary. Do not enter into this sort of arrangement without doing a lot of research. It's a sweet deal when it works, and a nightmare when it doesn't.

Posted : April 10, 2011 10:41 pm
Posts: 263
Reputable Member

Websites like VRBO and Homeaway have a large rental home base in the islands and elsewhere. We generally list our property with them, pay all of the fees including all of the cleaning out of pocket and give our manager 10-25% depending on the type and season of the rental. For monthly rentals where they sign a 12 month lease term would be of the lowest percentage with nightly and weekly having the higher commision but more work would go into that same property to manage.

I'd have to agree with ms411 on getting a clear understanding. The compensation that you'd be getting alone for free living would be considered huge in the islands.

Posted : April 10, 2011 10:47 pm
Posts: 2138
Noble Member

Let’s assume that your benefits are:
- Free rent
- A commission on bookings

And your responsibilities, at your expense, are:
- Marketing, booking, paperwork
- Cleaning

And the owner pays for:
- Maintenance, repairs, insurance, utilities, etc.

Booking agents doing roughly the above get about 30% commission, but they don’t get free rent, and they charge extra for cleaning and maintenance, so for the assumptions above, I would charge a 25% to 30% commission. The exact amount depends on a myriad number of details about your specific case. I suggest calculating what you will effectively be getting paid in dollars per hour (you’ll have to assign a value to your free rent), and I would aim for roughly $25/hour. And make sure your duties are specifically described, or you may find yourself doing landscaping, catering to the owner, and everything else basically for free.

Beyond my assumptions above, is the owner trying to push a lot of risk onto you? Is there a possibility of you losing money in the deal? If so, I would enter into such a deal only if I had the experience to be confident of producing results. Is there a requirement that you generate some minimum occupancy? For a villa with no previous rental history, there's a good chance you'll get zero bookings in the first few months. The marketing takes time to have an effect, and guests tend to book months ahead. It can take 2 to 3 years to reach peak occupancy.

As SunnyCaribe said, these deals can be sweet or nightmares. I know of properties where the caretakers are “lifers” and I know of others where the caretakers quit every 6 months because it’s so horrible.

Posted : April 11, 2011 1:59 am
Posts: 39
Eminent Member
Topic starter

Thank you everybody who responded, we really appreciate your time and your input.
It seems the most important factor in a situation like this is our relationship with the owners and being able to communicate honestly...We are seriously considering taking this position.

Posted : April 11, 2011 3:34 pm
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