Running Costs for Airbnb Property: Important to Know

Learn about the three key costs of running an Airbnb property, which could be the difference between average and excellent rental returns.

Have you considered how much you could earn if your property was a short term rental? Operating your home as an Airbnb property boasts attractive returns but is more complex than just traditional renting, with more running costs involved. To capitalise on the appealing returns in the short stay market, it's vital to understand and manage your running costs effectively. A clearer understanding of costs will influence your pricing strategy as well as how you market your property, directly affecting its success or failure as accommodation.

Platform fees (ie Airbnb fees)

Platform fees refer to the commissions and fees taken by Online Travel Agencies (OTAs) for taking a booking on behalf of a short term rental property. The most common OTAs are Airbnb, Booking.com, Expedia and their related websites. Platform fees vary between platforms and can range from 10% to 20% of the value of the booking. Staypilot uses an assumption of 15% for platform fees when calculating costs for area & property appraisal.

Example: A guest makes a booking for an apartment in Melbourne and pays $1000 total. The OTA (e.g. Airbnb) takes a 15% commission of $150, and transfers the remainder - $850, to the owner or property manager.

Cleaning fees

Cleaning fees refer to the cost of property cleaning & laundry of linen after the departure of each guest group from the property. Cleaning & laundry make up the largest portion of ongoing running costs of an Airbnb property. A professional cleaner charges an average of $50 per hour, while laundry can cost $7 to $10 per kilo to be taken off site, washed, dried and folded. Staypilot can help to balance the cost of cleaning with quality of cleaning by utilising our vetted & trusted cleaning partners.

Example: A group of 4 people have just left a 2 bedroom, 1 bathroom apartment in Melbourne. A cleaner takes two hours to clean the apartment, charging $100. The linen and towels are taken off site to be washed, dried and folded, costing $50. The total cost of turnover is $150.

Management fees

Management fees refer to the commission taken by a short term property manager in exchange for the running of the property. The services received in exchange for this fee can vary depending on the property manager. At Staypilot, our service is fully comprehensive, and starts at 15% of net rental income after platform and cleaning fees are deducted. Our service includes:

• Locally based property manager

• Multi-channel listing

• Smart pricing strategy

• Guest management

• Turnover & maintenance coordination

We can also provide all guest consumables, toiletries and home supplies, as well as linen and bedding for an additional fee.

Example: Following a completed booking which totalled $1000, $700 remains as net rental income after platform and cleaning fees. The property manager applies their fee of 15% to $700, which is $105 in management fees. The remaining $595 is transferred to the property owner.

Other costs

The above fees are the most significant costs in running a short term property. Other running costs specific to short stay properties include: short term rental home & contents insurance, government levies or rates on short term properties (if applicable) and property maintenance such as gardeners or pool cleaners.

Get a custom cost breakdown for your home

Our local short term rental experts can generate a breakdown of gross to net rental income specifically for your home. If you want to learn more about how running costs may affect your short term rental returns, contact us today.

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About Staypilot 

Staypilot provides comprehensive short-term rental management services to homeowners in Melbourne, Geelong, the Bellarine Peninsula and the Mornington Peninsula. Our platform blends extensive experience with a personal approach, delighting owners and guests alike. By listing your home with Staypilot, you can enjoy the exceptional returns of the short stay market without the hassle.