Performance-Based Property Management Fees: A Full-Year Worked Example

Most STR property managers will quote you a percentage and never show you the math. We think that's backwards. The fee is the thing you'll feel every quarter, and you should know exactly how it behaves before you sign anything.

This post walks through a full year on our fee model, in dollars, using a real-looking Park City property. The numbers below aren't from a specific owner. They're an average composite of what we see in our portfolio.

The Fee, Recapped

Our fee is tied to one number: your agreed quarterly revenue goal. The goal is set together at onboarding and reviewed every quarter, based on comparable property data, your pricing strategy, and seasonality.

Beats the goal: 23%

Hits the goal: 20%

Misses the goal: 17%

That's the entire structure. There's no asterisk, no clawback, no hidden math.

Why Quarterly, Not Monthly

STR demand isn't flat. Park City's January is not Park City's October. If we recalculated monthly, a single bad week would distort an otherwise strong quarter (and the same in reverse).

Quarterly smooths seasonal variance enough that the goal-vs-actual comparison is fair to both sides. It also keeps the relationship simple. One conversation per quarter about what's working and what's next, instead of twelve.

The Property

For this example, we'll use a 3-bedroom, 2-bath home in Park City, walking distance to Park City Mountain Resort. The owner self-managed for two years and decided to hand it off in January.

Onboarding numbers:

• Annual revenue last year (self-managed): $94,000

• Average daily rate: $385

• Occupancy: 67%

• Cleaning fee: $185

The quarterly goals were set together at onboarding using market comp data and seasonality patterns. Here's how the year played out.

The Year, Quarter by Quarter

Q1 (January - March): Peak ski season

• Quarterly goal: $36,000

• Actual revenue: $33,500

• Result: Miss

• Fee tier: 17%

• Fee paid: $5,695

• Owner take: $27,805

What happened: a warmer-than-average February cut into the late-season ski demand. Pricing held, but occupancy slipped on weekday nights. The owner's fee dropped to 17% for the quarter.

Q2 (April - June): Spring shoulder

• Quarterly goal: $14,000

• Actual revenue: $14,000

• Result: Hit

• Fee tier: 20%

• Fee paid: $2,800

• Owner take: $11,200

What happened: shoulder-season Park City is a tough market. The goal was set realistically, and we landed exactly on it. Steady performance, base fee.

Q3 (July - September): Summer

• Quarterly goal: $22,500

• Actual revenue: $25,200

• Result: Beat

• Fee tier: 23%

• Fee paid: $5,796

• Owner take: $19,404

What happened: a strong July, helped by hiking and mountain biking demand the owner hadn't tapped before. We added a trail-access amenity callout to the listing, refreshed the photos, and pushed midweek rates up. The quarter exceeded goal.

Q4 (October - December): Early ski + holidays

• Quarterly goal: $26,000

• Actual revenue: $26,800

• Result: Beat

• Fee tier: 23%

• Fee paid: $6,164

• Owner take: $20,636

What happened: holiday week pricing was the lever. We held firm on Christmas-week rates and locked in a 7-night minimum, which beat the more flexible defaults in the market.

Annual Totals

• Gross revenue: $99,500

• TruStay fee: $20,455 (effective rate: 20.6%)

• Owner net (before non-fee expenses): $79,045

Compared to a Flat 25% Manager

Most STR managers in Park City charge between 25% and 30% flat. Let's use 25% as a fair midpoint.

At a flat 25% on $99,500 in revenue, the manager's fee is $24,875 and the owner's net is $74,625.

The owner pays us $4,420 less for the same year. That's not a margin trick. It's the cost of the quarter we missed.

Compared to a Flat 18% Manager

There are also lower-cost flat-rate managers, often in the 18-20% range. At 18% flat on $99,500, the manager's fee is $17,910 and the owner's net is $81,590.

That owner pays us about $2,545 more across the year than they would have paid the cheaper manager.

So is our model worse than a low-cost flat rate?

Sometimes. Here's the honest answer.

When This Model Wins for Owners

Three conditions tilt the math toward our model:

1. Goals are realistic. A goal padded with optimism makes us miss often, which is good for the fee but bad for the owner because the property is actually underperforming. Goals set with real comp data are the ones that work.

2. The manager can actually beat the goal sometimes. If a manager can't ever push above goal, our model is just a 17-20% flat rate with extra paperwork. Our team uses dynamic pricing, channel optimization, and listing-quality work to hit beat quarters at least once or twice a year.

3. The owner values accountability over absolute lowest cost. We are not the cheapest. A flat-rate manager at 15-18% with no skin in the game will quote you less per quarter. The question is whether you trust them to perform without that skin.

When a Flat Rate Wins

Two scenarios where a low-cost flat-rate manager is the better economic choice:

1. The property is in a saturated, flat-demand market where there's no real upside to capture. If everyone's at 65% occupancy and $200 ADR with no moves to make, paying for performance you can't get is silly.

2. The owner wants a hands-off arrangement and doesn't care about the gap between average and great. Cheaper is cheaper, and that's a legitimate preference.

We won't be a fit for those owners. That's fine.

What Owners Should Ask Any Manager

Before signing with anyone, including us, here are five questions worth asking:

1. Show me the math on your fee for an average year on a comparable property.

2. How is my revenue goal set, and how often is it reviewed?

3. What happens to your fee if you miss the goal?

4. What's your average occupancy across your portfolio in this market?

5. How will I know each quarter whether you're earning your fee?

If the manager hesitates on question 3, you have your answer.

The Short Version

Our fee is 17% if we miss your quarterly goal, 20% if we hit it, and 23% if we beat it. Across an average year, that lands between 19% and 21% effective, which is competitive with most flat-rate options and structurally better aligned with your interests.

Want to see the math on your specific property? Get a free TruQuote. We'll model your numbers with real comp data, agree on a quarterly goal that makes sense, and you'll know exactly what each quarter will look like before you sign anything.

We only win when you win.