If you’ve ever handed your property to a management company and felt underwhelmed—or downright ripped off—you’re not alone. The world of short-term rental (STR) property management can feel like the Wild West: some gold, a lot of dirt, and way too many snake oil salesmen.
In this post, we’ll cover:
- The Ideal Property Manager’s Role: Making you more money, protecting your property, and creating incredible guest experiences.
- Why Most Property Managers Fall Short: We’ll break down common complaints and systemic flaws.
- Where the Industry is Headed: A shift toward brand-focused, incentive-aligned management.
- What Owners Can Do to Get Better Results: Specific steps for finding a great partner and setting yourself up for success.
Let’s dig in.
The Ideal Property Manager: What They Should Do
At their best, a property manager (PM) is a combination of an investment advisor, concierge, and customer service pro. Their job is to:
- Increase Your Earnings: Maximize occupancy, optimize pricing, and improve reviews to boost revenue.
- Protect Your Asset: Ensure regular maintenance, catch issues early, and prevent guest-related damage.
- Deliver a Five-Star Experience to Guests: Happy guests = glowing reviews, repeat bookings, and higher rates.
In other words, they should make your life easier and your bank account bigger.
Why Most Property Managers Suck: A Breakdown
So why do so many fall short? Here are some of the most common issues:
- Heavy Reliance on Virtual Assistants (VAs): While VAs can be helpful for repetitive tasks, over-reliance leads to impersonal service and poor communication.
- Impersonal, Cookie-Cutter Service: Many PMs don’t know your listing’s unique quirks, which leads to mistakes like bad guest instructions or mismatched amenities.
- Misaligned Incentives: Like real estate agents who prioritize a quick sale over maximizing your price, many PMs focus on volume, not quality.
- Long-Term Contracts: Many PMs lock owners into contracts that are hard to exit, even when service is subpar.
- Hidden Fees and Lack of Transparency: Some PMs charge guests for things like pets or late checkouts but pocket the fees instead of passing them on to the owner.
The Commoditization Problem
Most property managers view their role as simply managing a commodity: a bed, a roof, and a location. The goal is to fill the calendar and move on.
Hotels, on the other hand, don’t just rent rooms—they sell an experience. The Marriott doesn’t just offer a bed; they promise reliability, cleanliness, and comfort across the globe.
Many PMs, especially in high-demand markets like Hawaii, take the lazy approach:
“People will always want to come to Waikiki. As long as the listing is clean and the price is decent, we’ll book.”
This mindset leads to mediocre guest experiences, neutral (at best) reviews, and owners wondering why they aren’t making as much money as they should.
Incentives Shape Behavior
The traditional property management model suffers from a fundamental misalignment of incentives. Most property management companies charge a flat percentage of gross revenue, typically between 15–25%. While this structure ensures they get paid, it fails to align their interests with either the property owner or the guest. Managers earn the same percentage whether the guest experience is exceptional or mediocre, creating little incentive to go the extra mile. For example, a lackluster review due to subpar service might not immediately impact the manager’s earnings, but it could harm the property’s long-term revenue potential, which the owner ultimately bears. This misalignment leads to a “good enough” approach rather than striving for excellence.
Humans Respond to Incentives
If you’ve never heard someone rave about their property manager, that’s because the incentive structure for most PMs doesn’t reward exceptional service. But it could.
The Shift: The Future of Property Management
The STR industry is maturing. Guests and owners are raising their expectations. Savvy PMs are starting to operate more like boutique hotels, focusing on brand, experience, and reputation.
What Winning PMs Will Do Differently:
- Build a Brand: A great PM doesn’t just “manage”—they create a brand experience guests can trust and return to.
- Align Incentives: Exceptional PMs tie their compensation to results. (For example, our Island Stays Hawaii team has a Five-Star Guarantee—we don’t get paid if your guest leaves a review below five stars.)
- Transparency and Communication: Clear, honest reporting and a commitment to passing through any extra revenue (like pet fees) to the owner.
What Property Owners Can Do to Protect Themselves
The good news? Great property managers exist—you just have to know what to look for. Here’s a quick checklist, or if you want a more in depth list of questions to ask, look at this article.
1. Look for Aligned Incentives
Avoid PMs who profit from mediocrity. Ask about their compensation structure:
- Do they offer guarantees tied to guest reviews or earnings?
- Do they share extra revenue (pet fees, parking, etc.) with you?
2. Check Their Track Record
Look for:
- Consistent five-star reviews.
- Detailed reporting on earnings and expenses.
- Transparent communication.
3. Beware of Cookie-Cutter Approaches
If a PM’s pitch sounds generic, it probably is. Ask:
- How do they tailor their service to your unit?
- How do they handle guest communication and special requests?
Action Steps for Property Managers
If you’re a PM reading this, here’s how to level up:
- Build a Brand: Think beyond spreadsheets and occupancy rates. Your goal should be to create a boutique experience that sets you apart.
- Align Your Incentives: Tie part of your compensation to guest reviews or net earnings. Owners will trust you more, and guests will notice the difference.
- Deliver Surprise-and-Delight Moments: A welcome basket, a handwritten note, or thoughtful local recommendations go a long way.
Closing Thoughts: The Opportunity in STR Management
The bar for property management has been low for too long—but that’s changing. Guests want more than just a place to sleep. Owners want more than passive, impersonal management.
The future belongs to operators who build brands, align incentives, and focus on experience. Whether you’re an owner or a property manager, there’s a massive opportunity here if you’re willing to do the work.
If you’re looking for a better approach, start by asking better questions—and don’t settle for cookie-cutter service. Your guests deserve better. You deserve better.