What to charge as commission for marketing a property?

[jvcc]

Hello fellow property owners,

I have been marketing my holiday cottage via the Internet. I am now in discussion with the owners of another holiday property regarding marketing theirs too. They have little business at present although it is a very desirable property. Also they would like it if I handled all of the enquiries and bookings

I am to come back to them with my proposed renumeration for this service.

I used to use a letting agency, which charged about 23% of rental received plus VAT and an annual fee, but they had a whole marketing machine behind them and published a glossy brochure.

So I am not sure what commission I should charge and if I should charge for handling the enquiries....maybe 15% of rentals received. Perhaps a monthly retainer fee for handling enquiries.

I would be very grateful to hear what other property owners think.

Thank you!

[apexblue]

Hello and welcome. We manage another property and charge 15% for bookings only. We also get 10% for referring enquiries which convert to bookings from another property. Hope this helps.

[Hells Bells]

I think it depends on how much you are involved, if you simply take thew enquiry, and pass it on to the owner, my apartment manager charges us 5%,but I do all the remaining admin, collecting payments etc This is in addition to the 10% of theg gross rental she receives for keyholding, meet and greet etc. Cleaning and laundry are extra.

[jvcc]

Thanks for the feedback! That's very helpful.

I will be doing more than simply taking enquiries. I will be working on the marketing of the property, e.g. researching web site listings, improving search engine rankings, reciprocal links and more.

I won't be on site so will not be managing the property (it's in another country!)

If anyone else has further examples or suggestions I'd love to hear.

Thank you

[vrooje]

I used to use a letting agency, which charged about 23% of rental received plus VAT and an annual fee, but they had a whole marketing machine behind them and published a glossy brochure.

It would be interesting to see which parts of the marketing machine were actually effective -- I bet it wasn't the glossy brochure. And anyway, those are not that hard to make yourself nowadays. At the heart of every marketing machine is a competent person or two doing a lot of the same stuff you'd have to do if you went at it on your own.

I recently helped a family friend begin the process of marketing her ski condo. She had previously let her condo organization do all the marketing, and they charged her a very high percentage and usually only booked a few weeks a year. Within a few days of setting up one listing site ad, she had already taken three bookings and she has taken quite a few more since then.

The point of that example is not that this process is easy (we all know that's not so), but that it is entirely possible for one person to create their own "marketing machine" nowadays. I think 23% is quite reasonable if you handle everything but on-site management, even if you're not a big organization.

Have also sent you a PM.

[e-richard]

Who pays for advertising/listing sites ?
Agent or owner ?

I think 23% is quite reasonable if you handle everything but on-site management.

Sounds about right to me if the agent is paying for advertising, and thus taking some "risk", otherwise it sounds a tad high.

[jvcc]

Thanks all for the feedback!

I don't think I would pay out-of-pocket for any advertising but I would handle everything else to do with web site listings.

Appreciate everyone's opinions!

[Mountain Goat]

One point to consider is who takes responsibility and accepts liability when things go wrong with a guest and/or the property. Unless you have some legal entity it could get sticky.

MG

[jvcc]

Ah, a good point.
Thank you