How much do property managers charge
How much do property managers charge is the wrong half of the question, and the half that is easy to answer badly. A percentage means nothing until you know what it is a percentage of: the same figure applied to gross booking value and to income net of expenses describes two arrangements that can differ by a third or more over a year.
This guide is about the base rather than the rate. It does not publish this office's numbers, and it does not publish anyone else's without a source — what it does is name the four things a fee can sit on, the costs that are almost never inside it, and the questions that make a quote comparable. Where the money is actually shown, line by line, is the subject of monthly owner reporting.
What is a management fee actually calculated on?
A management fee is calculated on one of four things: gross booking value, the amount the platform actually remits, income after operating expenses, or a flat amount per month regardless of either. Everything else in a quote — the rate, the tiers, the inclusions — is downstream of that choice, which is why it is the first thing to establish and the thing most quotes leave implicit.
In Mexico the gap between those bases is not theoretical, because several parties take a slice before the owner sees the money. A platform selling lodging is required to withhold 4% of the total income actually received through it, excluding value added tax, and a company paying rent directly is required to withhold 10% of the amount as a provisional payment, without any deduction. A percentage of gross and a percentage of what lands in the account are therefore never the same number.
Value added tax is the second gap, and it is the one owners of exceptional houses meet most often. Renting a property used exclusively as a dwelling is not subject to the tax, but the law says plainly that this does not apply to properties, or parts of them, that are supplied furnished or used as hotels or lodging houses. A furnished house rented by the week is on the other side of that line from an unfurnished annual lease, and the word «gross» means something different on each side.
The four bases a fee can sit on, and what each one has already had taken out of it:
| The base | What it contains | What has already come out of it |
|---|---|---|
| Gross booking value | What the guest paid, before anyone deducted anything | Nothing |
| Platform remittance | What the platform transfers to the owner's account | The platform's commission and its 4% withholding on lodging (LISR, art. 113-A) |
| Income net of expenses | What remains after the running costs of the house | Utilities, maintenance, insurance premiums, property tax and the other items the law names as deductions (LISR, art. 115) |
| A fixed monthly amount | Nothing — it does not move with income | Not applicable: the house pays it in a month with no guests at all |
What is the difference between a fee on gross and a fee on net?
A fee on gross is paid before the house's costs; a fee on net is paid after them. The difference is not arithmetic hygiene: it decides who carries the cost of a bad month, and it changes what the manager is being paid to optimise.
On gross, the manager's income rises with turnover regardless of what the turnover cost to produce. On net, the manager's income falls when the house spends, which aligns the two sides on expenses and misaligns them somewhere else — an office paid on net has an interest in the house spending less, and a house that spends less than it should is a house that ages faster than it should.
Neither structure is honest or dishonest by itself; what makes a quote legible is that the base is written down and that the word «net» is defined by naming the deductions rather than by using the word. When you compare fees for property management services across two offices, the comparable quantity is not the percentage — it is the percentage together with the base and the list of what that base excludes.
What is usually not included in a management fee?
Four things sit outside almost every management fee, and none of them is unusual enough to be a surprise: the trades' own invoices, the house's running costs, anything requested rather than scheduled, and the cost of preparing the house at the start.
Property management fees for vacation rentals attract one further question that annual leases do not: who pays for the turnover between guests. Cleaning, linen and consumables between stays are a per-stay cost of operating the house, and whether they are recharged to the guest, to the owner, or absorbed in the fee is a genuine difference between offers that a single percentage hides completely.
What is a reasonable management fee?
There is no published, verifiable benchmark for Mexico that this office is willing to quote, and inventing one would be the least useful thing this page could do. What can be said is structural: a fee is reasonable when the base is named, the exclusions are listed, and nothing in the arrangement pays the manager more for spending the house's money.
The figures that circulate when you search for the average cost for property management services, or the typical vacation rental property management fees, are drawn overwhelmingly from the United States rental market — a market with different tax withholding, different tenancy law and a different mix of long-term leases. A number produced there is not wrong; it is measuring something else.
The useful test is comparative rather than absolute. Take two quotes, apply each to the same twelve months of the same house, including the months with no guests, and compare what the owner keeps. That exercise settles in an afternoon what a debate about property management fees percentage never settles at all.
Are there setup or fixed monthly costs?
Sometimes, and it is worth asking directly, because a fixed component changes the shape of a bad year more than the rate does. A fixed monthly charge is paid in the months the house earns nothing, which is precisely when an owner of a rarely-used house notices it.
This office does not charge fixed or setup costs: only a percentage of income, net of expenses. That is the whole of what it is willing to say about its own pricing on a public page, and it is said here because the alternative — a page about fees that is silent about its author's structure — would be the kind of discretion that reads as evasion.
For an owner who is not a Mexican tax resident there is a further reason to look at the whole picture rather than the fee alone. Rental income from property located in Mexico received by a non-resident is taxed by applying 25% to the income obtained, with no deduction at all, withheld by whoever makes the payment — a figure that dwarfs any management fee and that no fee structure changes. It belongs in the same conversation, and it belongs to the owner's own adviser rather than to a manager.
What questions reveal how a manager really charges?
Five questions, and they are all about the base rather than the number. Asked together they make two quotes comparable in a way that no rate comparison does, and they take a few minutes to ask.
The answers should arrive as a statement rather than as reassurance. A management arrangement is legible when the owner can rebuild the manager's fee from the same lines that produce the net — which is the reason the monthly statement and the fee are one subject and not two.
How much do vacation rental management companies charge?
No figure worth quoting exists for Mexico from a source this page can verify, and the published averages describe the United States market rather than this one. The comparable quantity is not the rate but the rate together with its base: apply two quotes to the same twelve months of the same house, empty months included, and compare what the owner keeps.
Is a management fee charged on gross or on net income?
Both arrangements exist, and the difference decides who carries a bad month. A fee on gross is taken before the running costs of the house; a fee on net is taken after them, which is why any quote that uses the word «net» should also list the deductions it means by it.
What does a management fee not cover?
As a rule: the vendors' own invoices, the running costs of the house, anything requested rather than scheduled, and the one-off work of setting the house up. Concierge errands in particular are optional, quoted before each one is carried out, and billed separately rather than included.
Does a foreign owner pay more than a Mexican owner?
Not in the management fee, but the tax withholding is different in kind. Rental income from property located in Mexico received by a non-resident is taxed by applying a rate of 25% to the income obtained, with no deduction, withheld by whoever makes the payment, and how that interacts with the owner's own residence is a question for their tax adviser.