Is Property Management expensive?
The standard fee for a hotel management contract varies widely and depends on various factors such as the size of the hotel, location, and services provided. Typically, hotel management companies charge a percentage of the hotel's gross operating revenue, ranging from 4% to 12%. Some hotel management companies may also charge an additional flat fee or a performance-based bonus. The exact terms of a hotel management contract can be negotiated between the hotel owner and the management company, so it is recommended to obtain a written agreement that clearly outlines the terms and fees involved. This compares to the multi-family residential industry where property owners typically pay between 8% and 10% of monthly rent revenue to a property manager. Vacation rental property management is more expensive; management fees are usually between 20% and 30% of revenue. However, when considering the time and expertise needed to manage a property, hiring a property manager is often worth the expense.