He wants me running the bungalow I just gutted. I own no cleaning carts.

Your two fee structures are not close to each other, so the choice mostly resolves once you pick an occupancy assumption and stick to it.

At $35k gross, 20 percent pays you $7,000. The flat structure pays $12,000 with no upside share, since nothing is above $50k. At $44k, the percentage pays $8,800 and the flat still pays $12,000. Your flat quote only loses if the house clears roughly $70k, which a two bed at $185 blended does not do at any credible occupancy. So the flat quote is worth more to you across the entire realistic range, and the 10 percent kicker is decoration. If you want the structure to actually align, drop the flat to something that covers your fixed cost of carrying the account and move the threshold down to where your revenue work shows up, which on these numbers is closer to $38k than $50k.

The assumption doing the most work is that 52 to 65 percent occupancy band. That is a 26 percent swing in your pay under a percentage deal and zero swing under the flat. Ask where the comp occupancy came from and whether it counts owner-blocked nights as unavailable or as vacant, because those two conventions produce different numbers off the same calendar.

On cleaning, price it as a guest-paid passthrough at true cost, and do not absorb same-day premiums into your fee.

Registration and inspection regimes for short-term rentals are set locally and change, and in some states managing rentals for a fee can touch real estate licensing. Confirm both in writing with the city and with an attorney licensed there before you sign anything.

Split it into three priced things and the decision gets easier.

One, setup. Registration filing, inspection prep, listing build, photos, house manual, lock and pricing tool config. That's 25 to 40 hours on a first property and it disappears when you bury it inside a percentage. Quote it at a flat number, invoice it before the first booking. On a $118k reno client that reads as normal, he's already used to seeing a scope and a price from you.

Two, the permit and inspection relationship. That is the only real moat you have here and it's worth more than the nightly operations. Sell it as an annual compliance retainer that renews with the inspection cycle. It's the same work you're already doing on the reno side, so your marginal cost is low.

Three, operations. This is the part you can't staff and shouldn't fake. Either you find a cleaner with held weekend blocks and a named backup, or you don't sell operations at all this year.

Keep the reno contract and the management agreement as separate documents with separate termination terms. If the management side goes bad in August you do not want it giving him an argument about punch list items from the gut.

If you can only get one of the three sold, sell setup and compliance and hand him operations. You keep the client, you get paid for the knowledge that's actually scarce, and you don't own a cleaning cart.