What Your Memphis STR Manager Is Actually Costing You

Most short-term rental owners in Memphis look at management fees the same way. They see a percentage, compare it to a couple other companies, and pick the one that feels reasonable. But the percentage alone doesn't tell you much. What matters is what you're actually paying for and what's happening to your money after that fee comes off the top.

Let's break it down honestly.

The average STR management company in Memphis charges somewhere between 15 and 20 percent of gross revenue. That's the industry standard and most owners accept it without asking too many questions. But here's what a lot of owners don't realize. That 15 to 20 percent fee usually doesn't include cleaning. It doesn't include maintenance. It doesn't include laundry or supplies or restocking. Those are all separate line items, and they add up fast.

Where it really starts to hurt is when your manager is outsourcing the work. Most management companies don't have their own cleaning crews. They hire third-party cleaners, and those cleaners charge a premium because they can. A third-party cleaner might charge 150 to 200 dollars per turn on a three-bedroom house. They're running their own business, setting their own prices, and your manager is just passing that cost straight through to you. Some managers even mark it up before it hits your statement.

So now you're paying 18 percent off the top for management, plus premium cleaning rates from an outside company your manager doesn't even control. That's a double hit to your bottom line every single month. And the worst part is you might not even be getting better service for it. Third-party cleaners work for multiple clients. Your property isn't their priority. If they get a bigger job or run behind schedule, your unit sits dirty and you miss a booking.

We charge 10 percent. And we run our own cleaning teams, our own maintenance crews, and our own laundry facility. That's not a minor detail. That's the whole difference.

When we handle cleaning in-house, we control the cost, the quality, and the timing. Our cleaners aren't juggling other clients. They're on our schedule, trained to our standards, and turning units in 45 minutes because that's what this market demands. We're not marking up a third-party invoice and sending it to you. We're doing the work ourselves at a lower cost because we've built the infrastructure to do it efficiently.

Run the math on a property grossing 4,000 dollars a month. At 18 percent management, you're paying 720 a month just in fees. With third-party cleaning at 150 a turn and 20 turns a month, that's another 3,000 in cleaning alone. You're at 3,720 in operating costs before a single maintenance call or supply restock.

Now run it with us. Ten percent of 4,000 is 400 in management fees. Our cleaning costs are significantly lower because we're not paying a third party's overhead and profit margin on top of the actual labor. The savings on cleaning alone across a full year can be thousands of dollars. That's money that stays in your pocket instead of subsidizing someone else's subcontractor.

And it's not just about cost. It's about control. When your manager owns the operation from top to bottom, problems get solved faster. A cleaning issue gets caught and fixed before the next guest checks in because the manager and the cleaner work for the same company. A maintenance request gets handled the same day because we have techs on staff, not a handyman we're hoping will call us back.

When your manager is outsourcing everything, there are gaps. Communication gaps between the manager and the cleaner. Scheduling gaps when the third party is overbooked. Quality gaps when nobody is watching the work closely enough. Those gaps don't show up on your monthly statement, but they show up in your reviews, your occupancy rate, and your revenue over time.

The owners who come to us from other management companies almost always have the same realization. They weren't just overpaying on the fee. They were overpaying on everything underneath it, and getting less reliable service in the process.

A lower management fee only matters if the operation behind it can actually deliver. Anyone can charge 10 percent and cut corners. The reason our owners see better results is because we built the operation first and priced it to be competitive second. The in-house cleaning, the maintenance team, the laundry facility, the 45-minute turns. That infrastructure is what makes 10 percent sustainable without sacrificing quality.

If you're currently paying 15 percent or more and your manager is still sending you third-party cleaning invoices, it's worth asking what exactly that fee is covering. Because in a lot of cases, you're paying a premium for someone to coordinate vendors rather than actually do the work.

Got questions about what you're really paying for STR management? Text us at 901.883.5084 and we'll walk you through it.