Property Management

The commission

OBX full-service property management runs 15–22% of gross rent (range 10–25%), and the big names — Twiddy (~1,000 homes, the premium manager), Village Realty, Seaside Vacations, KEES, Brindley Beach — mostly don’t publish rates. Plan on ~18%. On $120k gross that’s ~$21,600/year — your single largest operating line. HIGH (range) MED (Twiddy specifically)

What it buys

Full-service typically includes: marketing and listing distribution, the booking engine and dynamic pricing, 24/7 guest service, payment/accounting and tax remittance, housekeeping coordination, and maintenance dispatch. In a weekly, Saturday-to-Saturday market with high guest turnover and a demanding clientele, this is real labor — the fee buys occupancy and your sanity.

The hidden cost: it can kill your tax loophole

Here’s the trap most spreadsheets miss. The short-term-rental tax loophole requires material participation — you doing the work. If Twiddy does everything, you likely fail material participation, and the six-figure paper losses you were counting on to offset W-2/business income become passive and suspended.

So there’s a genuine fork:

• Want the tax shelter? Self-manage or co-manage, and log your hours. You keep more gross and qualify for the loophole — but you’re now running a hospitality business.
• Want the passive lifestyle? Hand it to a PM at ~18%, accept the drag, and treat the deal as appreciation + personal use + covered operations.

You mostly can’t have both. Decide before you buy. HIGH

The DIY / co-host middle path

Some owners self-list (Airbnb/VRBO) and hire à la carte cleaning + a local maintenance contact, or use a “co-host” at a lower fee. This lifts NOI by several points of gross and preserves material participation — at the cost of your time and a steeper learning curve in a market where the big PMs own the demand. For a hands-on operator, it’s often the highest-return choice.