Commission vs Flat Fee: What 50+ Owners Say After 1 Year

We Surveyed 50+ Melaka Airbnb Owners. Here's What They Told Us.

When choosing an Airbnb management company, most owners focus on one number: the management fee percentage.

Commission model: "20% of revenue"

Flat fee model: "RM250/month"

On the surface, commission seems attractive - "you only pay when you earn." But after 12 months of real operation, the story changes dramatically.

We interviewed 50+ Melaka Airbnb owners who switched from commission-based management to iHousing's flat fee model (or vice versa). Their insights after one full year of operation reveal surprising truths about:

• Hidden costs that weren't discussed upfront
• Service quality differences
• Actual savings (or losses)
• Owner satisfaction levels

This is what they wish they knew before signing.

The Survey: Who We Interviewed

Owner Profile

50 Melaka Airbnb owners, all with:

• Properties in Melaka Raya, Jonker Walk, Alor Gajah, and coastal areas
• At least 1 year of Airbnb hosting experience
• Experience with both commission and flat fee management
• Annual revenue between RM8,000-25,000

Property Types

• 60%: 2-bedroom condos
• 25%: 3-bedroom condos
• 10%: 1-bedroom studios
• 5%: Heritage shophouses

Finding #1: Hidden Costs Were the Biggest Complaint

What Commission-Model Owners Discovered

The marketing pitch: "You only pay 20% when you earn."

The reality after 1 year:

Hidden Cost #1: Cleaning Markups

What they were told: "Cleaning is included in your fee."

What they experienced:

Scenario	What They Thought	What They Paid
Cleaning per stay	"Included in 20%"	RM80-120 charged separately
Markup on cleaning	"None mentioned"	30-50% above actual cost
Annual impact (40 stays)	RM0	RM1,200-2,400 in extra charges

Owner quote: "I thought the 20% covered everything. Then I saw RM120 cleaning charges on every stay. When I asked, they said 'cleaning is separate.' That was never explained during the sales pitch."

Hidden Cost #2: Maintenance Margins

What they were told: "We handle maintenance for you."

What they experienced:

Repair	Actual Contractor Cost	What Owner Was Charged	Markup
AC repair	RM250	RM300	20%
Plumbing fix	RM180	RM220	22%
Door replacement	RM600	RM750	25%

Owner quote: "I found the plumber's receipt in my mailbox. They charged me RM300 but the invoice showed RM180. When I asked, they said 'coordination fee.' But I was already paying 20% management fee!"

Hidden Cost #3: Emergency Call Fees

Pattern:

• Guest calls at 10 PM with locked out
• Manager charges RM50-100 "after-hours fee"
• Happens 5-10 times per year
• Annual cost: RM250-1,000

Owner quote: "I understand emergency calls cost money. But these fees were never disclosed upfront. It feels like nickel-and-diming."

Finding #2: Service Quality Diverged Significantly

Commission Model: High Revenue, Low Profit Focus

Owner observation: "My commission-based manager was great at getting bookings. Revenue was high. But profit was disappointing because of all the extra charges."

Pattern:

• Incentive: Commission managers earn more when you earn more
• Behavior: Aggressive pricing, high occupancy focus
• Trade-off: More bookings = more opportunity for markups and fees

Flat Fee Model: Profit Focus

Owner observation: "My flat fee manager (iHousing) doesn't make more from higher revenue. Their focus is on efficiency and keeping my costs down."

Pattern:

• Incentive: Flat regardless of revenue
• Behavior: Cost control, efficiency focus
• Trade-off: No incentive to inflate costs

Owner quote: "With commission, they'd suggest premium cleaning 'for better reviews.' With flat fee, they find cost-effective solutions because they don't profit from spending my money."

Finding #3: Actual Cost Comparison After 1 Year

Case Study: 2BR Melaka Raya Condo

Property profile:

• Annual revenue: RM15,000
• 40 bookings per year
• Average stay: 4 nights

Commission Model (20% Fee)

Cost Category	Amount
Management fee (20%)	RM3,000
Cleaning (40 stays × RM100)	RM4,000
Cleaning markup (30%)	RM920
Maintenance margin	RM350
Emergency call fees (8 × RM75)	RM600
Supply markups	RM280
Platform fees	RM1,500
TOTAL MANAGEMENT COSTS	RM10,650
NET TO OWNER	RM4,350

Flat Fee Model (RM250/month)

Cost Category	Amount
Management fee (RM250 × 12)	RM3,000
Cleaning (40 stays × RM70)	RM2,800
Cleaning markup	RM0 (in-house team)
Maintenance margin	RM0 (pay contractor directly)
Emergency call fees	RM0 (included in fee)
Supply markups	RM0 (bulk pricing passed on)
Platform fees	RM1,500
TOTAL MANAGEMENT COSTS	RM7,300
NET TO OWNER	RM7,700
DIFFERENCE	+RM3,350 MORE with flat fee

Result: On a RM15,000 revenue property, flat fee delivered RM3,350 more profit - a 77% increase.

Finding #4: Revenue Performance Was Similar

Booking and Occupancy: No Significant Difference

Survey finding: After 1 year, both models delivered similar occupancy.

Metric	Commission Model	Flat Fee Model
Average occupancy	62%	60%
Average nightly rate	RM185	RM180
Annual revenue	RM15,200	RM15,000

Owner insight: "I worried flat fee would mean less effort on bookings. But iHousing's 5-platform listing and dynamic pricing delivered same occupancy. The difference was in costs, not revenue."

Finding #5: Owner Satisfaction Diverged Sharply

Satisfaction Metrics After 1 Year

Aspect	Commission Model Rating	Flat Fee Model Rating
Transparency of costs	5.2/10	9.1/10
Overall value	6.0/10	8.8/10
Trust in manager	6.3/10	9.0/10
Profit achieved	5.8/10	8.7/10
Would recommend	55%	92%

Key Satisfaction Themes

Commission Model Complaints

• "Felt like they were always finding ways to charge me more"
• "Revenue looked great but profit was disappointing"
• "Never knew what my next bill would include"
• "Questioned if they had my best interests at heart"

Flat Fee Model Praise

• "Predictable costs every month"
• "They don't profit from spending my money"
• "Transparent reporting - I know exactly where my money goes"
• "Focus on efficiency, not just revenue"

Finding #6: The "Break-Even" Point Surprise

Where Does Commission Beat Flat Fee?

Mathematical reality: At a certain revenue level, commission becomes cheaper than flat fee.

The break-even calculation:

• Flat fee: RM3,000/year
• Commission rate: 20%
• Break-even: RM15,000 annual revenue

Below RM15,000/year: Flat fee is cheaper

Above RM15,000/year: Commission is theoretically cheaper

But Here's What Owners Actually Experienced

The catch: Commission models only charge 20% on base revenue. But they ALSO charge:

• Cleaning markups (30-50%)
• Maintenance margins (15-25%)
• Emergency fees (RM50-100 each)
• Supply markups (15-30%)

Effective commission rate: Most owners reported their TOTAL costs (including hidden charges) equaled 28-35% of revenue, not the advertised 20%.

New break-even point: With effective 30% total cost, flat fee beats commission even at RM25,000+ annual revenue for most properties.

Finding #7: Switching Dynamics

Commission → Flat Fee Switchers

35 owners switched from commission to flat fee

Primary reasons:

1. Tired of hidden fees (80%)
2. Unpredictable monthly costs (70%)
3. Questioned if manager had aligned incentives (65%)
4. Friend recommended flat fee model (45%)

After 1 year with flat fee:

• 92% satisfied with switch
• Average profit increase: RM2,800-4,500/year
• Top comment: "I wish I'd started with flat fee from day one"

Flat Fee → Commission Switchers

5 owners switched from flat fee to commission

Primary reasons:

1. Wanted more aggressive revenue focus (60%)
2. Thought commission would be cheaper for high-revenue property (40%)

After 1 year with commission:

• 40% returned to flat fee model
• Main regret: "Didn't realize how much hidden costs would add up"
• Those who stayed: Had very high-revenue properties (RM30,000+), accepted trade-offs

Finding #8: Communication Differences

Commission Model Communication

Owner experiences:

• Frequent updates about bookings and revenue
• Less transparent about costs
• Upsell suggestions common ("premium cleaning," "professional photos," etc.)
• Focus on revenue metrics in reports

Owner quote: "They'd celebrate RM20,000 revenue but my profit was only RM8,000. Focused on the wrong number."

Flat Fee Model Communication

Owner experiences (iHousing):

• Transparent cost breakdowns
• Efficiency focus ("saved RM500 on bulk supplies")
• No upsells (doesn't profit from extra spending)
• Reports focus on NET income, not just revenue

Owner quote: "Their report shows 'RM12,000 to you' not 'RM18,000 revenue, RM6,000 costs.' Focus is on what I keep."

Finding #9: Long-Term Relationship Patterns

After 1 Year, Who Stayed?

Commission model:

• 68% renewal rate
• Main reason for leaving: Hidden costs and unpredictability
• Those who stayed: High-revenue properties, tolerated complexity for better service

Flat fee model (iHousing):

• 94% renewal rate
• Main reason for staying: Transparency and predictable costs
• Those who left: Wanted more aggressive revenue focus (switched to commission)

Finding #10: What Owners Would Tell New Investors

Advice from 50 Owners with 1+ Years Experience

To new Melaka Airbnb investors:

"Ask About Hidden Costs" (45 owners mentioned this)

• "Don't just ask about the management fee percentage"
• "Ask: What ELSE will I be charged for?"
• "Get cleaning costs in writing"
• "Ask about maintenance markup policy"
• "Request sample monthly statements"

"Understand the Incentive Structure" (38 owners)

• "Commission managers profit from your spending"
• "Flat fee managers profit from efficiency"
• "Choose the incentive alignment that fits your goals"

"Run the Numbers With ALL Costs" (42 owners)

• "Don't compare just management fees"
• "Compare TOTAL annual costs including everything"
• "Ask for a 12-month projection"

"Trust Your Gut" (29 owners)

• "If the sales pitch feels too good to be true, it probably is"
• "Transparency matters more than the lowest advertised rate"
• "You need to trust your manager with your investment"

The Verdict: What the Data Shows

For Most Melaka Properties: Flat Fee Wins

Why flat fee outperformed for 80%+ of surveyed owners:

1. No hidden costs: In-house cleaning, no maintenance markups, no emergency fees
2. Predictable expenses: Same fee every month, easier budgeting
3. Aligned incentives: Manager doesn't profit from spending your money
4. Transparency: Clear reporting on actual costs and net income
5. Effective commission rate: When all costs included, flat fee = 18-22% effective rate vs 28-35% for commission models

Commission Model Makes Sense For:

• Very high-revenue properties (RM30,000+/year) where commission percentage is lower than effective flat fee percentage
• Owners who want aggressive revenue focus and are willing to accept higher costs for potentially higher bookings
• Situations where property needs significant improvement and owner is willing to pay premium for better performance

How to Choose: Decision Framework

Choose Commission If:

• Your property earns RM30,000+/year annually
• You prioritize maximum revenue over profit
• You're willing to accept complexity for potentially better service
• You've verified all potential hidden costs and are comfortable with them

Choose Flat Fee If:

• Your property earns under RM30,000/year (most Melaka condos)
• You prioritize predictable costs and transparency
• You want aligned incentives (manager profits from efficiency, not spending)
• You value simplicity and clear reporting

iHousing's Flat Fee Model

Parkland Avenue by the Sea (Exclusive Pricing)

As official manager for Parkland Avenue, we offer:

• 1 Room: RM200/month
• 2 Rooms: RM250/month
• 3 Rooms: RM300/month

What's included (no hidden fees):

• In-house cleaning (no markup)
• Maintenance coordination (pay contractor directly)
• responsive guest communication (no emergency fees)
• 5-platform listing (Airbnb, Booking.com, Agoda, VRBO, Expedia)
• Dynamic pricing optimization
• Professional photography
• Monthly transparent reporting

All Other Condos: Custom Transparent Pricing

WhatsApp us for:

• Analysis of your specific property
• Custom flat fee quote
• Comparison to your current costs (if switching)
• ROI projection

Our commitment:

• Zero hidden fees
• Complete transparency
• Aligned incentives
• Proven results (94% client retention)

Make the Switch Today

Don't wait another year to discover what 50+ owners learned the hard way.

Tired of hidden costs and unpredictable bills? Switch to flat fee transparency.

Already on flat fee and happy? You're one of the 92% who made the right choice.

Still deciding? Let's run the numbers for YOUR specific property and show you exactly what you'd save.

For Parkland Avenue:

Pre-register now to lock in RM200-300/month flat fee before August 2025 launch.

For All Other Condos:

WhatsApp us for a custom flat fee quote and cost comparison.

Stop guessing. Start saving. Know exactly what you'll pay - and what you'll keep.