There are so many costs to take into consideration when running a holiday let, so commission fees on top of everything else can seem off-putting. However, they are for the most part a necessary evil when signing up with a holiday letting agency.
You may have already discovered that hardly any of the agencies mention these rates on their websites. Below are the average commission costs you can expect to pay, how commission costs are worked out, and ways you can save on your budget.
How is commission worked out?
Commission fees via holiday letting agencies are usually worked out based on a percentage of the booking cost. Most agencies work out their costs this way, although some larger holiday letting websites (such as Home Away) have a paid listing amount starting at around £350+. This is a good option if it turns out that they book up most of your available seasons. At first this is hard to know.
If you’re also paying for services such as property management (cleaning, laundry and maintenance) then these costs can be charged on top of your booking commission.
The average commission fees
For an average holiday let, the fees you can expect to pay are roughly 20% – 25% for bookings only. However, some of the smaller agencies may offer more competitive rates – for instance, we were charged 15% during our first year, which is highly competitive for the market. Note that they will charge VAT on the commission you pay to them.
Unfortunately, for most holiday letting agencies, the only way to really know how much commission you can expect to pay is to actually call them up and ask. This is because, like I said above, not many agencies will display these costs up front on their website.
Determining your costs
To figure out your costs, the best thing to do is to call up a few different agencies and work out exactly how much commission each will charge – as well as everything that’s included for that fee, such as:
- Marketing
- Administration
- Property management
- Changeovers
- Cleaning/laundry
- Waste disposal
- Professional photos
Ways to save on budget
If you are switching from another agency you may find you have some bargaining power since you are already established and may have your other services in place, such as cleaning. You may or may not require a photo service either.
Some agencies are able to offer holiday let owners a bespoke service tailored to fit their needs, and this can be a great way to save on costs if you don’t want to pay for a full property management service. So, all you need to do is pick the services you need, and do the rest yourself!
The trick here is to pick a holiday letting agency that is happy to let you do that, but also be around to offer support and advice if and when you need it. Consider also whether they expect you to be exclusive to them or if they are happy for you to also be with other agencies.
Take your time when choosing and ensure you’re 100% confident it’s the right agency for you. Understand their payment structure - when do they release payments to you, what is their cancellation policy and if they operate a damage deposit policy, how does that work.
In summary
If you’re in the market for a holiday letting agency, one of the first things you’re going to want to learn is how much commission you can expect to pay, and exactly what you’re getting for your money – yet hardly any agencies actually display detailed costs on their website!
It’s usually worked out as a percentage of the overall booking cost, and the average you can expect to pay is around 20 – 25%. However, for full property management services, fees can be even higher, so I’d recommend talking to a few different agencies and getting some quotes to give you a rough idea.
You can save on your budget by choosing a bespoke service, and taking on some of the responsibilities yourself – however, I’d recommend finding an agency who will be there to offer support and advice when needed.
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