Property Management Fee: What You Pay and What You Get
What you pay a property manager to run the rental for you. Usually 8% to 10% of the rent. Set this to 0% if you plan to manage it yourself.
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The management fee is what a property manager charges to run a rental for you. The headline number is usually 8% to 10% of collected rent, but it is rarely the only charge, and the extras are where the real cost sits.
The full fee structure
| Fee | Typical | Notes |
|---|---|---|
| Monthly management | 8% – 10% of rent collected | On collected, so a vacancy costs them too |
| Letting / tenant placement | 50% – 100% of one month's rent | Each new tenant |
| Lease renewal | US$150 – US$300 | Per renewal |
| Maintenance markup | 0% – 10% on invoices | Ask directly |
| Inspection | US$100 – US$200 | Sometimes included |
| Eviction handling | US$300 – US$500 + legal | Varies |
| Setup | US$0 – US$300 | One-off |
An example
A US$1,450 rental managed at 9%, with one tenant turnover in the year and a half-month letting fee:
| Amount | |
|---|---|
| Monthly management (9% × 12) | US$1,566 |
| Letting fee (half month) | US$725 |
| Lease renewal | n/a |
| Total year one | US$2,291 |
That is about 13% of gross rent, not 9%. Budgeting the headline rate alone understates management by a third in a turnover year.
What to clarify before signing
- Is the fee on collected or scheduled rent? Collected is much better for you.
- Is there a markup on maintenance invoices, and a threshold above which they must call you?
- Do they hold in-house maintenance staff or subcontract? In-house can be cheaper or a profit center; ask how it is priced.
- Termination terms: notice period, and any fee to leave.
- Who keeps late fees and application fees?
- How often are statements and disbursements issued?
When self-managing makes sense
Self-managing saves the whole fee and is realistic if you live near the property, have time, and are willing to take maintenance calls. On a single local rental, saving US$2,300 a year for a handful of hours a month is a reasonable trade.
It is a much worse trade on an out-of-state rental. You cannot show a unit, meet a contractor or handle an emergency from several states away, and trying to is how distant rentals go wrong.
Either way, budget the fee in your analysis even if you intend to self-manage. If a deal only works because you are working for free, it is not the property producing the return, and the day you want to stop managing, the deal stops working.
Related reading
How to find a property manager for an out-of-state rental covers vetting and the contract terms that matter.
Longer reads on this
Related terms
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