What hits your account: the only number to compare short let management on

Most landlords choose a management company the way they'd choose a broadband deal: the lowest headline percentage wins. In reality two companies quoting fees five points apart can leave you with payouts hundreds of pounds a month apart, in the other direction, because the fee is a slice of a number the company controls.

The number to compare is what lands in your account at the end of the month, after everything. Here's how to get it and what moves it.

Why the fee is the wrong number

A management fee is a percentage of what the property earns. Two things decide your payout: the size of the percentage, and the size of what it's taken from. Companies advertise the first because it's easy to print. The second is where the money is.

Take a two bed that could earn £2,800 a month on short lets if it's priced properly and full. A company charging a low fee that gets it to £2,000 leaves you with more than a tenancy but well short of what the flat can do. A company charging more that gets it to £2,800 leaves you further ahead after the fee than the cheap one did before it. The fee moved a few hundred pounds. The revenue moved more.

That's the whole argument. The fee is a cost. The revenue is the lever. A company should be judged on the lever.

What actually moves the revenue

Nightly pricing. A flat priced once a season earns one number. A flat repriced every day against events, lead time and what's left in the area earns another. The gap on a busy weekend in Bristol or a stadium weekend in Cardiff is the difference between a good month and an average one.

Occupancy across four kinds of guest. Weekend visitors alone leave the weekdays empty. Contractors, staff on placement and families relocating fill them. A property set up and listed for all four has fewer empty nights, and empty nights are the void period in a different coat.

Direct bookings. Every booking through a platform pays a commission before you see it. A company with its own booking site and a base of companies and hospitals booking direct keeps more of each night, which arrives in your account, not the platform's.

Reviews. A listing at 4.9 sells higher than one at 4.6, and the difference compounds over a year. Cleaning, response time and how problems are handled are revenue items, not overheads.

How to get the real number from any company

Ask for a projection for your property, in this shape: gross booking revenue, minus platform commission, minus cleaning and consumables, minus the management fee, equals your payout, per month, over a year. Ask what occupancy and average nightly rate it assumes. Ask what set-up costs sit outside it.

If a company can only give you the fee, it can't tell you what you'll earn, and that's the answer.

Then compare payouts, not fees. The company that leaves the most in your account is the cheapest one, whatever it charges.

Where the fee model does matter

A fee that only comes out of what the property earns means the company earns nothing in a bad month either, which is the incentive you want. A fixed monthly fee or a guaranteed rent breaks that: the first charges you the same in a quiet January, the second sells your upside for a discount. Neither is cheaper over a year for a property that can perform.

Set-up costs are the other thing to pin down. Photography and furnishing are quoted upfront by companies that are straight about it, and folded into a higher fee by companies that say "no set-up fees". Upfront is cheaper over any period longer than a year.

The honest version

Short lets carry costs a tenancy doesn't: cleaning between stays, linen, more wear, platform commission. They also earn more per night, which is where 30 to 50% more income comes from once those costs are paid. The only way to know what your property would do is to see the projection with every line on it.

That's what the income estimate is. It shows the payout, not the fee.

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