Guides
A short-term rental management proposal template for first-year owners, section by section
An eleven-section short-term rental management proposal template for first-year owners, with guidance on quoting variable costs without inventing figures.
What to take away
- A proposal to a property owner is a scope document with a price attached, and most of the arguing later is about scope rather than price.
- Every variable item needs a stated basis, not a range. "Charged at cost plus a stated margin, with anything above an agreed amount approved first" is a basis. "Typically modest" is not.
- Never put a revenue projection for the owner's property in the document. You cannot support it and it will be quoted back at you.
- The proposal is also your operating brief. Anything you promise here becomes something a cleaner has to do on a Saturday.
The eleven sections
Use this order. It moves from what the owner cares about to what they will care about later.
Eleven Proposal Sections
- 1. What you are asked to do
- 2. Property as found
- 3. Scope of service
- 4. Scope exclusions
- 5. The fee
- 6. Variable costs
- 7. Money handling
- What you are being asked to do, in one paragraph, in the owner's words. If the owner says "we want it looked after and the calendar full", write that down and define what looked after means in hours a month.
- The property, as you found it, including anything that will need attention before it can be let. Example: no blind in the second bedroom, two stains on the mattress, and a smoke detector past its date.
- Scope of servicewhat is included, itemized. Give each duty its own line, such as listing setup, photography, guest messaging, clean scheduling, restocking, and the monthly statement.
- Scope exclusionswhat is not included, itemized, and where each of those goes instead. Example: a deep clean after a long stay is excluded and is quoted per hour before the work is booked.
- The fee, with the basis for each element. A management fee of 20 percent of net rental revenue sits inside the typical United States range of 15 to 25 percent.
- Variable costs and how they are authorized. Name the trigger and the approval route, for example repairs above a stated monthly amount need the owner's yes before a contractor is called.
- Money handlingwhose money is whose, and where it sits. Say which account takes guest payments, which holds the owner's reserve, and how the owner draws their share.
- Reportingwhat the owner receives, and by when each month. Name the day and the format, for example a written statement and a transaction file on the fifth business day.
- Compliance responsibilities, split between you and them. Put the business licence and the insurance certificate in the owner's column, and the lodging tax filing dates in yours.
- Term, notice, and what happens to existing bookings if either side ends it. Say 30 days notice either way, and that bookings already taken run to their check-out date on the same terms.
- What you need from them to start. List each item with a datedoor codes, utility account numbers, the insurance certificate, and written authority to list the property.
Section four is the one that prevents disputes. An owner who reads what is excluded and signs anyway has agreed to it. An owner who discovers it in month three has been surprised, and surprise is what ends accounts.
Writing section five without inventing figures
The fee section should carry a basis for every element rather than a number for some and silence for others.
Fee Elements: Basis vs. What Not to Write
Basis to state
- Management
- Percentage of net revenue, net defined
- Turnovers
- At cost plus stated margin, per turnover
- Maintenance coordination
- Hourly above a stated allowance
- Projects and works
- Quoted individually before commencement
- Onboarding
- One-time, stated, with what it covers
- Out-of-hours callouts
- Stated basis and what counts as out of hours
What not to write
- Management
- Percentage with no definition of base
- Turnovers
- Folded silently into the percentage
- Maintenance coordination
- Handled as part of the service
- Projects and works
- An open-ended hourly rate
- Onboarding
- Waived to win the account
- Out-of-hours callouts
- Nothing, which means you absorb them
Where a fee element cannot be priced in advance, the section states a rule instead of a number, and linen is the usual example.
Take the most common awkward case. The property will need linen replaced at some point during the year and neither of you knows when or how much.
The right version sets a mechanism: linen is replaced only when it fails inspection against an attached written standard. Replacement is charged at cost, and anything above an agreed monthly amount is approved by the owner before spending. The monthly report lists every replacement and its reason.
So the owner knows what triggers a cost, controls its size, and you avoid an open-ended obligation.
The fee that sits above it stays a percentage of net rental revenue, in a typical range of 15 to 25 percent, while linen costs sit below that line.
Use the same shape for anything you cannot price in advance. Trigger, basis, approval threshold, and where it appears in the report. It works for maintenance callouts, consumables, and damage recovery, and it works because it replaces a number nobody has with a rule both of you can check.
Copy the skeleton below into section five and fill each bracket:
| Fee element | Stated basis | When it is charged |
|---|---|---|
| Management fee | [15 to 25] percent of net rental revenue, typical range | Monthly, from owner proceeds |
| Setup and listing | Flat [amount], agreed before you start | Once, on signature |
| Linen replacement | At cost, invoice attached, above [monthly amount] approved first | On the monthly report |
| Deep clean | Quoted per hour at [rate] before the work is booked | Only when the owner asks |
Define "net" explicitly. Net of channel commission, net of taxes collected, net of refunds. Owners and managers regularly mean different things by it, and it is a poor thing to discover after the first payment.
Worked example: quoting a variable you cannot price yet
Linen Replacement Mechanism
- Trigger: fails inspection against written standard
- Basis: charged at cost
- Approval: above agreed monthly amount, owner approves
- Report: monthly report lists every replacement and reason
Two failures show up in first drafts.
The wrong version says linen is included. That is a promise with no ceiling, and the first time a set is ruined by a guest it comes out of your margin.
The wrong version in the other direction gives a number. You do not have one, and quoting an invented figure in a signed document is worse than saying so.
Both wrong versions give the owner a figure where what they needed was a rule.
The section owners actually read twice
Section eight, reporting.
What the Reporting Section Must Say
- What arrives, in what form
- By which day of the month
- What happens if a figure is corrected
- Who they contact with a question
- How fast an answer comes
This is the section that decides whether a property stays under management in year two, well ahead of the fee. An owner who gets a clear report on the same day every month forgives a great deal. An owner chasing a report forgives nothing, and no fee discount recovers the trust that goes with it.
Money that is not yours
Section seven should be short and unambiguous.
Whose Money Is Whose
Money
- Lodging tax collected from guests
- Tax authority
- Money held on behalf of the owner
- Owner
- Your fee
- You
Owner
- Lodging tax collected from guests
- Money held on behalf of the owner
- Your fee
Lodging tax collected from guests belongs to the tax authority. Money held on behalf of the owner belongs to the owner. Your fee is yours. All three arrive in the same place and the document should say how they are separated and how the owner can see the split.
Keep the records that support it. The Internal Revenue Service sets out what records a business is expected to keep, and a proposal that references a real recordkeeping practice reads very differently from one that does not.
What must never appear in the document
Never Appear in the Document
- Projected annual revenue for this property
- Projected occupancy
- Comparison to similar properties in the area
- Any figure presented as an expectation you cannot evidence
These are claims, and a proposal is advertising. The Federal Trade Commission's advertising guidance for small businesses sets the standard, and the specific hazard is that a revenue figure written to win an account becomes the number the relationship is judged against for as long as it lasts.
If the owner asks for a projection, offer the method instead: how a rate is set, what drives occupancy in that market, and what turnover cost does to the result.
The derivation is in the pricing and profit guide. The break-even point, where a property covers its own costs, is worked through in the profit margins and break-even guide.
Pricing the proposal before you send it
Price the property in front of you, not the portfolio average, because two houses in the same town can carry different turnover and compliance costs.
Run the unit through the per-unit cost derivation first, so the percentage you quote sits above the floor for this specific property rather than above the portfolio average. That method is how to price short-term rental services.
Where labor cost is uncertain, ground it rather than guess. The Bureau of Labor Statistics publishes employment and wage estimates by area and occupation, giving you a base for the region before you load it.
Where the property will need its own cleaner rather than sharing one, that is a hiring decision with its own cost. It is covered in the hiring and training guide.
Where a property in a different jurisdiction is involved, the compliance work restarts, and that belongs in the proposal as a cost rather than as goodwill. The reasoning is in the expansion and market guide.
Common questions
How long should a proposal be?
Long enough that sections three and four are itemized. Everything else can be brief.
Should I show the fee as one number?
Show the elements. A single number invites a comparison with a competitor whose scope you cannot see, and losing that comparison on scope is worse than losing it on price.
What if the owner wants a guarantee?
Say plainly that you cannot guarantee revenue from someone else's asset in a market neither of you controls, and offer a guarantee on something you do control, such as reporting dates or response times.
Can I reuse the same document for every owner?
Reuse the structure. Sections two, six and nine change with the property and the jurisdiction, and copying them forward is how a wrong compliance split gets signed.
Do I need a lawyer to look at it?
Once, for the term, notice and liability sections. After that the changes are commercial rather than legal.
