Top Financial Strategies for Vacation Rental Managers

As the vacation rental industry matures, financial strategy is becoming a major differentiator between companies that thrive and those that struggle. In a recent webinar hosted by Topkey, a panel of experts gathered to share insights on financial operations, profitability, trust accounting, and the tools property managers need to succeed in 2025 and beyond.

The panel included:

• Jacobie Olin, President of C2G Advisors, an expert in vacation rental M&A
• Ben Coons, Owner of Keystone Bookkeepers, specializing in trust accounting and financial reporting
• Jon Sukhia, CEO & Co-founder of Topkey, a financial operating system for property managers
• Moderator: Darren Carter, Topkey

From COVID Boom to Margin Compression

The conversation opened with a frank discussion of the post-COVID market correction. Between late 2020 and early 2022, property managers saw record-breaking revenues and rising ADRs. But as demand normalized and expenses stayed high—or even increased—many companies found themselves caught off guard.

“We see bloated expenses with revenues remaining flat or decreasing,” explained Olin. “Managers weren’t prepared for this and now need to focus on detailed budgeting and profitability tracking.”

Budgeting and P&L Best Practices

The panelists emphasized the importance of understanding the business’s finances on a per-property basis, not just in aggregate.

Ben Coons recommended starting with accurate booking revenue forecasting, especially for seasonal markets, and building from there:

• Separate out revenue streams: commissions, cleaning, tech fees
• Forecast and track direct costs (COGS) for each service
• Structure your P&L with clear gross profit margins

Jacobie Olin added that too many companies still don’t include a cost-of-goods-sold (COGS) section in their P&L, making it impossible to benchmark or evaluate margins.

Easy First Steps to Clean Up Your Financials

Jon Sukhia asked a critical question: What’s the first thing someone should do if they’re not starting from a clean slate?

Ben’s answer:

1. Get the booking revenue off your income statement. That money belongs to owners and can distort your numbers.
2. Break out your revenue and expense lines by category. This allows you to analyze profitability and make informed decisions.

Profitability Benchmarks and Margins

What does healthy profitability look like in the vacation rental space?

• Payroll should be ~20–25% of P&L revenue (excluding cleaners)
• Net profit should be in the 20–30% range
• Take rate (what goes on your P&L from guest bookings) should be 35–45%

If you’re not hitting those numbers, it’s time to reassess. As Sukhia noted, “Revenue and expenses are both levers you can pull. You don’t just have to grow top-line—you can improve margin by eliminating leakage.”

Reimbursables, Tech Fees, and the Courage to Charge

A recurring theme was the importance of charging appropriately for services, especially reimbursables and tech fees.

Coons shared that many companies aren’t passing along reimbursable expenses, or are undercharging on technology. “Tech fees typically range from $100–$150/month per property. It’s okay to charge what you’re worth.”

Sukhia added, “Don’t be afraid to explain the value to owners. We help clients build that argument and introduce tech fees during onboarding.”

Trust Accounting: Reality vs. Ideal

Trust accounting was one of the most discussed, and misunderstood, topics.

Ideal scenario: All booking revenue goes into a trust account. From there, payments go to owners and the operating account for reimbursables and commissions.

Reality: Many managers dip into trust to cover expenses, especially during low season, creating underfunding risks.

“We’ve seen deals fall apart due to underfunded trust accounts,” said Olin. “In M&A, that’s a huge red flag.”

Topkey and Keystone both emphasized the importance of automated tracking tools, proper reconciliations, and bank account separation to stay compliant and professional.

Banking Best Practices

Sukhia shared what to look for in a modern banking system:

• FDIC-insured sweep accounts for protection beyond $250K
• Low fees: Some PMs are paying $2,500/month in unnecessary charges
• Bulk payments: Essential for owner and vendor payouts
• User access management: Avoid shared logins
• Integrations with QuickBooks, PMS, and accounting systems

Systems That Actually Work Together

On the software front, Coons advised every PM to invest in a general ledger system (like QuickBooks Online) as the foundation, and then layer in:

• PMS integrations
• Owner statement platforms (VRPlatform, Clearing)
• Expense management tools like Topkey
• Class tracking in QuickBooks for per-property profitability analysis

Owner Statements, Faster

Owner payouts are under more scrutiny than ever.

Keystone’s team aims for 5 business days post-close. “Biggest holdup? Expenses. Managing Amazon and Walmart receipts, tracing them back to properties - this is where Topkey shines.”

M&A Multiples and the Power of Clean Books

For managers looking to eventually sell, Jacobie provided this guidance:

• Companies with $250K–$1M in EBITDA: Expect a 3–5x multiple
• $1M+ EBITDA: 5–7x or more, especially if you’re clean and scalable

But the multiple isn’t everything.

“Structure matters,” Olin said. “More clean, professional companies command better terms and more upfront cash.”

Key Takeaways

1. Know your numbers. If you don’t know your margins, you can’t fix them.
2. Clean up your chart of accounts and P&L to track profitability by line item.
3. Charge what you’re worth—especially for tech, maintenance, and reimbursables.
4. Separate trust and operating accounts, and reconcile them monthly.
5. Automate what you can. Manual work adds risk and eats margin.
6. Prepare for exit by getting your books in order and improving financial hygiene.

Want Help? Here’s Where to Go

• C2G Advisors: c2gadvisors.com – M&A valuations and guidance
• Keystone Bookkeepers: keystonebookkeepers.com – Trust accounting and financial ops
• Topkey: topkey.io – Financial automation for vacation rental managers

If you're managing 20+ doors and tired of spreadsheets, receipts, or hours spent closing books, it might be time to modernize your stack.

Schedule a demo with Topkey today and let your financials work for you!