Managing a property includes both fixed and variable costs tied to time, effort, and resources. Many property managers believe that every charge deserves thoughtful oversight and keen attention to detail. Therefore, adding a commission to all fees—beyond just rent—can be viewed as a fair acknowledgment of the hard work and careful risk management that go into handling every financial aspect effectively.
Ultimately, the property manager has the choice to charge a commission on fees or expenses. The “everything is an expense” theory in property management treats all charges—rental income, cleaning, maintenance, and other fees—as expenses subject to a management commission. Property managers justify this approach by viewing all financial transactions as requiring their time, resources, and oversight, which incurs costs. By charging a commission on the total cash flow (not just rental income), they argue that they’re compensated for handling all aspects of property administration. This simplified, single-rate commission approach also clarifies the fee structure for owners, though it’s sometimes controversial among owners who feel commissions should apply only to rental income.
When you are setting up your Owners, you, as the property manager, have the opportunity to determine whether you want to pay for or have your owners pay for Channel and Transaction Fees. Once you choose the settings you want for each owner, you can use the PM > PM Settings > Bulk Updates > Bulk Update Commission & Expenses tool to update any existing bookings to match.
Channel Fees
First, what are channel or "host" fees? These are fees charged to you, the account holder, either by a channel such as Airbnb or Vrbo or a payment processor such as Stripe. Payment processor fees are displayed in the Fees grid on the Transactions tab of a booking, including the gross amount paid by the guest. If your payment processor does not pass that information to OwnerRez, you can add it manually to the booking.
Airbnb, Vrbo, and Booking.com all send host fee data, and those amounts are displayed in the Guest Balance > Guest Listing Site Fees. For instance, with a $100 payment and a 3% Stripe processing fee, you'll see a payment of $100 and a $3 Stripe Fee, not $97. Similarly, for a $300 Airbnb reservation, you'll see a $300 payment and a $9 host fee, not $291.
Channel fees include expenses and commissions, which are calculated on host fees, channel commissions, and other costs incurred from bookings sourced from listing channels and displayed on Owner Statements.
In the settings for each owner, you control how those channel fees are billed back to the owner. You can control both the fee itself and the commission portion. We'll use the example of the $300 Airbnb booking with a $9 host fee and 20% commission to demonstrate the effect of the options. On the charges tab, the 20% commission will be calculated on the entire $300, for a starting amount of $60 in commission.
Here are the default settings. Pay close attention when determining who will pay for the channel fees (e.g., host fees, channel commissions, etc.) and whether you will "give the commission back to the owner."
In the Expense section, you can make the following decisions.
- If you select the "Show as reimbursed expense on owner statement" default option, you classify channel fees for payment and refunds as owner expenses when processing channel transaction fees. This means the owner will pay the $9 channel fee, which will be deducted from their revenue.
- If you select the "PM will pay fees" option, you exclude these fees from being classed as an owner expense. As the property manager, this means that you will pay the $9 channel fee.
In the Give Commission Back? section, you decide on the following.
- When you choose the "Yes, give commission on this fee amount back to the owner" default option, the $60 channel fee commission configured will be returned to the owner.
- Choosing "No, keep the commission" means the PM will keep the $60 channel fee commission.
Transaction Fees
Transaction fees control how those expenses and commissions are calculated and displayed on Owner Statements.
Here are the default settings. Pay close attention when determining who will pay for the expenses and whether you will "give the commission back to the owner."
In the Expense section, you can make the following decisions.
- If you select the "Show as reimbursed expense on owner statement," you are classifying transaction fees for payment and refunds as owner expenses when processing transaction fees, meaning that transaction fees will be paid by the owner and deducted from their revenue.
- If you select the "PM will pay fees" default option, you are excluding these fees from being classed as an owner expense, meaning that you, as the property manager, will pay the transaction fees.
In the Give Commission Back? section, you decide on the following.
- When you choose the "Yes, give commission on this fee amount back to the owner" default option, any transaction fee commissions configured will be returned to the owner; the property manager will earn commissions on transaction fees, but they will be returned to the owner.
- Choosing "No, keep the commission" will keep transaction fee commissions for the property manager.