How do I factor management fees into my return analysis on 30A?

When analyzing a 30A investment, management fees should be treated as a core driver of your return, not a minor expense. This is how Jonathan Spears approaches underwriting, focusing on net performance rather than top-line revenue.

Start with gross rental income, then immediately deduct management fees, which typically range from 20% to 40% depending on the level of service. This gives you a more realistic view of income from the beginning. From there, factor in all other operating expenses like cleaning, maintenance, utilities, and HOA fees to determine your true net operating income.

Full-service managers may charge more, but they often increase occupancy and nightly rates through stronger marketing and guest experience. Lower fees can sometimes lead to lower overall revenue. The goal is not to minimize the fee, it is to maximize what you take home after it.

Jonathan’s approach is simple. Focus on what the property actually produces after all expenses. That net number is what drives your cap rate and cash-on-cash return.

A smart strategy is to run multiple scenarios using different fee levels and occupancy assumptions. This gives you a realistic range of outcomes and helps avoid overestimating returns.

The bottom line is that on 30A, strong investments are built on net performance, not gross projections.