Realtors are always on the lookout for ways to expand their business and boost their income. One often-overlooked opportunity is collaborating with short-term rental (STR) managers and property managers (PMs). By building relationships with these professionals, realtors can tap into a lucrative referral stream while helping their clients maximize the value of their investment properties. Here’s how realtors can benefit from the growing STR market and how referral fees work.
What Is a Property Manager or STR Manager?
A property manager (PM) or short-term rental (STR) manager is a professional who handles the day-to-day operations of rental properties. For STRs like Airbnb listings, these managers handle everything from guest communications, cleaning, and check-ins to managing bookings, setting competitive rates, and ensuring the property meets local regulations. Their expertise ensures that property owners can enjoy the financial rewards of hosting without the stress of managing it themselves.
For realtors, understanding the role of a property manager is essential. When working with clients who own or plan to purchase vacation homes or investment properties, a reliable STR manager can be the key to helping them generate passive income. This creates an opportunity for realtors to offer even more value by connecting their clients with the right management partner.
Ideal Properties for Short-Term Rentals
Not all properties are ideal for short-term rentals, and that’s where realtors can offer valuable insight. Homes that perform exceptionally well as STRs are typically luxury properties with high-end amenities. For example, homes with large backyards, private pools, spacious patios, and outdoor entertainment areas tend to attract vacationers looking for a premium experience. These properties offer more than just a place to stay—they offer a retreat, making them highly sought after in the STR market.
If you’re working with clients purchasing these types of homes, a partnership with a property manager can help them turn their luxury property into a profitable short-term rental.
How Realtors Can Partner with Property Managers
One of the best ways realtors can benefit from the STR market is by partnering with property managers. Here’s how you can get started:
Exchange Contact Information with a Property Manager
If you’re working with clients interested in rental income opportunities, it’s worth developing a network of trusted property managers. After closing a sale, clients may want to turn their new property into a short-term rental. By connecting them with a qualified property manager, you’re helping them take the next step toward turning their property into a money-making asset.
Make a Deal
Once you’ve established contact with a property manager, consider working out a referral deal. As a realtor, you can refer clients to the property manager, and in return, the property manager pays you a referral fee. This arrangement benefits everyone—the client gets access to a trusted property manager, the manager gets new business, and you earn a referral fee.
How Is the Referral Fee Calculated?
Referral fees can be structured in a few different ways, depending on the agreement between the realtor and the property manager. Typically, referral fees are calculated as a percentage of the management fee the PM charges for managing the property.
Here are some common referral fee structures:
- One-Time Flat Fee: The property manager might offer a flat fee for each referral, usually paid after the client signs a management contract.
- Ongoing Percentage: Some property managers offer a percentage of their monthly management fees for a set period (e.g., the first year). This can result in ongoing, passive income for the realtor as long as the manager continues to earn revenue from the client.
For example, if a property manager charges 20% of the monthly rental income to manage a short-term rental and agrees to a 10% referral fee, the realtor could earn 2% of the total monthly rental income as long as the contract remains active. Over time, this can add up to significant additional revenue.
Why Realtors Should Consider STR Partnerships
In addition to the financial benefits, partnering with STR managers allows realtors to offer more comprehensive services to their clients. Realtors can position themselves as trusted advisors who help clients navigate not only the home-buying process but also the post-purchase phase, guiding them toward maximizing their investment through short-term rentals.
By creating strategic partnerships with property managers, realtors can expand their professional network, build long-term relationships with clients, and create additional revenue streams—all while helping property owners succeed in the lucrative STR market.
Final Thoughts
As the demand for short-term rentals continues to grow, realtors have a unique opportunity to benefit by collaborating with property managers. By exchanging contacts, making referral deals, and understanding how referral fees are calculated, realtors can create a win-win situation for themselves, their clients, and property managers. If you’re a realtor looking to expand your business and income, now is the time to explore the potential of the STR market.
Need a trusted property management partner for your clients? Contact us and let’s work together!