Airbnb/Vrbo Pricing

This explanation is based only on Airbnb. The process for VRBO is similar. Owners should understand some basic facts:

• The price your guest pays could increase by more than 50% when taxes and fees are added by the third party.
• The total price your guest pays includes the fee you request, an Airbnb fee of 14%, a sales tax of 12%, and a cleaning fee.
• Owner income is reduced by two fees. The Airbnb 3% fee and then Christies Gulf Beach Rentals fee of 15%.
• Airbnb remits to Christies Gulf Beach Rentals the amount requested by the owner less their 3% fee plus the cleaning fee.
• Christies Gulf Beach Rentals deducts the cleaning fee from the Airbnb payment and then charges a 15% management fee. The balance is remitted monthly to owners.
• The entire cleaning fee is retained by Christies to cover the costs of cleaning the property. Owners do not pay for cleaning unless they stay in the property.
• Remember, any increase in the amount charged to the guest will result in more fees. For example, if the daily rate above went to $200.00, the gross would increase to $600. Add 26% for fees and the guest will pay $639. This is why it’s important to charge the maximum reasonable fee to obtain the highest occupancy

When even more fees are added, such as an HOA fee or pet fees, it makes the cost of staying at your property less attractive.

Many property owners thought they would manage their own property when they purchased it. Not including the 15% fee in their calculations may make it difficult to cover all costs. Christies charges a reasonable fee compared to the competition only. When you learn what you receive for the fee and compare it to what you are paid by the hour, it will seem to be a bargain.

Every trip to your property requires a cost for the vehicle and labor. Time negotiating with contractors, and meeting inspectors, and guests require a great deal of time. Consider the value of your time on the job.

Another thing to consider is that while you thought you may want to manage your property, it may be the case, and probably is, that your time is more valuable than paying Christies. If you work an 8-hour day and have to deal with problems several states away, that adds to the stress. Having an onsite manager will permit you to spend time on your career without carrying on a second one.

You will see if you have not already, a great value in working with Christies.

NOTE FOR ACCOUNTING:

Christies Gulf Beach Rentals operates under agreements with third parties including Airbnb and VRBO. Our property owners are not involved in these agreements. These providers send to Christies revenue as described above plus cleaning fees. We report the total revenue received from the third parties on the client spreadsheet.

The amounts reported to the IRS are the total income you will receive, which is subject to taxation. The cleaning fees are not part of the owner’s income nor are other fees as indicated in the management agreement which may include pet fees. This amount paid to owners is considered “Revenue” or “Rental Income” in your accounting system. Starting with Revenue or Rental Income, you would deduct any expenses you have paid for the property, including depreciation.

If you, as an owner, want to review actual revenue before ABB starts deducting, go to the applicable site, ABB or VRBO, and select the applicable date to see the rate charged. Attempt to book at ABB, for example, and you will see the total of all fees listed. Keep in mind that the actual charges may be less based upon reductions made for issues, e.g. AC went out.

Maintenance and other Costs:

When Christies pays a charge for your property, e.g., paying a plumber directly, we will subtract the amount from the revenue you have earned. This will reduce you revenue. You are not permitted by the IRS to deduct this cost because it was already deducted from your income. Christies deducts the charge from its income because it paid the bill. This is an important distinction that many clients are confused about.

To simplify, if you pay a bill, it is likely deductible. If you do not pay it, it is not. When Christies pays it, you are not paying it. The only document you need to provide to your CPA at the end of the year is the 1099 Misc which Christies provides to you. If you pay bills separate from Christies those payments may be deductible. It is always our preference that you pay a vendor bill directly and interact with the vendor directly.

The client portal presents you with as mentioned above, the actual amount received by Christies from the third-party providers. You are referred back to our example above.