How Much Do Property Management Companies Charge

Property management companies are a great way to help property owners stay on top of their responsibilities and maximize their investments. But it can be hard to know how much to expect to pay for these services. In this blog post, we will discuss the different types of fees that property management companies typically charge, and what you should consider when budgeting for these services. 

Whether you are looking for a comprehensive management package or only need certain services, understanding the cost associated with a property management company is essential. Read on to learn more about the fees and charges associated with property management companies.

What are Property Management Companies

Property management companies are professional entities that are responsible for managing properties on behalf of property owners. These companies offer a range of services that are designed to ensure that the property is well maintained, tenants are well taken care of, and rent is collected on time. 

In essence, property management companies act as intermediaries between property owners and tenants, providing a variety of administrative and maintenance tasks so that the owner can focus on other priorities. 

These tasks include handling tenant disputes, finding new tenants, performing regular inspections and repairs, and managing financial transactions. In short, property management companies take care of all the tasks associated with owning and renting out a property, ensuring that it is well-managed and profitable for the owner.

Factors that Affect Property Management Company Fees

If you’re considering hiring a property management company, you’re likely wondering about their fees. Property management company fees can vary widely based on several factors. Here are some of the most important factors that can affect property management company fees.

  1. Property type and size:

The type and size of your property will have a significant impact on property management company fees. A small residential property will typically have lower fees than a large commercial property, for example.

Property management company fees can vary by location, as well. If you have a property in a high-cost-of-living area, you may pay more for property management services than if you have a property in a more affordable area.

  1. Services provided:

Different property management companies offer different levels of service. If you want a company to handle everything from maintenance to rent collection, you’ll likely pay more than if you only want a company to find tenants and collect rent.

  1. Experience and reputation:

More experienced and reputable property management companies may charge higher fees. However, you may also be able to get more comprehensive and reliable service from these companies.

  1. Seasonal demand:

In some cases, property management company fees may vary based on seasonal demand. For example, if you have a vacation rental, you may pay higher fees during peak season when demand is high.

It’s important to keep these factors in mind when comparing property management company fees. By understanding what affects these fees, you can make a more informed decision about which company to hire.

Average Fees for Property Management Companies

If you are considering hiring a property management company, you might be wondering how much it will cost you. While the fees can vary widely depending on location and the specific services offered, here are some general guidelines on the average fees for property management companies.

Typically, property management companies charge a percentage of the monthly rent collected for each unit. The industry standard ranges from 8% to 12% of the monthly rent. For example, if you have a rental property that rents for $1,000 per month and the property management company charges 10%, the fee would be $100 per month.

There may also be additional fees for services such as leasing, tenant placement, and maintenance. These fees can range from a few hundred dollars to a percentage of the first month’s rent.

Some property management companies also charge a setup fee or an administrative fee. 

These fees cover the initial costs of setting up your account and can range from $100 to $500.

It is important to note that these fees are just averages and can vary depending on the location and the specific services offered by the property management company. 

It is always best to get a detailed breakdown of fees and services before signing a contract with a property management company.

While property management fees may seem high, it is important to consider the benefits of hiring a professional property manager. A good property manager can save you time and stress, while also maximizing your rental income and ensuring that your property is well-maintained.

In the end, the cost of a property management company will depend on your specific needs and the services you require. Be sure to do your research and compare fees and services before making a decision on which property management company to hire.

Different Types of Fee Structures for Property Management Companies

Property management companies typically charge a range of fees for their services. The fee structure may vary depending on the services offered and the specific needs of the property owner. Here are some common types of fee structures used by property management companies:

  1. Flat Fee: Some property management companies charge a flat fee for their services. This means that the property owner pays a set amount each month, regardless of the number of units or properties they own. This fee structure is best for property owners with a small number of units or properties.
  2. Percentage of Rent: This is the most common fee structure used by property management companies. Under this structure, the management company charges a percentage of the rent collected each month. Typically, the percentage is around 8-10% of the monthly rent.
  3. Tiered Fee Structure: Some property management companies offer a tiered fee structure. This means that the fees increase as the number of units or properties under management increases. For example, a property owner with 5 units might pay 8% of the rent collected, while a property owner with 20 units might pay 10%.
  4. Leasing Fee: In addition to monthly management fees, some property management companies also charge a leasing fee. This fee is typically a percentage of the first month’s rent and covers the cost of finding a new tenant.
  5. Maintenance and Repair Fees: Some property management companies also charge for maintenance and repair services. This fee may be a percentage of the cost of repairs or a flat fee per service call.

It is important to carefully review each fee structure and consider how it will impact your bottom line before hiring a property management company. Some fees may seem low initially, but additional fees can quickly add up, making it important to consider all the costs before making a final decision.

Additional Costs to Consider When Hiring a Property Management Company

When considering hiring a property management company, it’s important to factor in additional costs beyond the management fee. These costs can vary depending on the specific company and services offered, so it’s important to understand what’s included in the management fee and what costs may be extra.

One additional cost to consider is advertising and marketing expenses. Some property management companies will charge extra fees for marketing your property, including online ads, signage, and flyers. These costs can vary depending on the level of marketing and advertising required for your property.

Maintenance and repair costs may also be an additional expense. Some property management companies offer in-house maintenance services, while others will outsource repairs to third-party vendors. It’s important to understand how these costs will be managed and what types of repairs are covered under the management agreement.

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Another potential cost to consider is lease renewal fees. If a tenant renews their lease, some property management companies may charge an additional fee for this service. It’s important to understand if these fees are included in the management agreement or if they are charged separately.

Late fees and eviction costs may also be additional expenses to consider. If a tenant is late on their rent or if an eviction is necessary, there may be extra costs associated with these processes. It’s important to understand how these costs are managed and what the property management company’s policies are in these situations.

Also, it’s important to consider the cost of hiring a property management company in the first place. Some companies may charge a setup fee or require a long-term contract with penalties for early termination. It’s important to understand the terms and costs associated with hiring a property management company before signing a contract.

Overall, understanding the additional costs associated with hiring a property management company is important in making an informed decision. By understanding the various fees and costs involved, you can compare and choose a property management company that offers the services and fees that best fit your needs.

How to Compare and Choose a Property Management Company

Once you have a list of potential property management companies, it’s important to compare and choose the best one for your needs. Here are some tips on how to do just that:

  1. Read reviews and ask for referrals: One of the best ways to find a good property management company is to read reviews from other landlords and property owners. You can also ask for referrals from colleagues, friends, or family members who have used property management services in the past.
  2. Check for licensing and certifications: In many states, property managers are required to hold a real estate broker’s license. Check with your state’s regulatory board to ensure that the company you’re considering is licensed and in good standing. Additionally, look for certifications from professional organizations such as the National Association of Residential Property Managers (NARPM).
  3. Look at their experience: Ask about the property management company’s experience in managing properties similar to yours. It’s important to find a company that has experience managing properties in your location, as well as the type of property you own.
  4. Review their fees: Property management fees can vary greatly from one company to another. Take the time to review the fee structure of each company on your list, and ask for a breakdown of their costs. Make sure you understand exactly what is included in the fee and what is not.
  5. Ask about their services: Different property management companies offer different services, so it’s important to ask what services they offer and which ones are included in the fee. For example, some companies may offer tenant screening, rent collection, and property maintenance services, while others may only offer a few basic services.
  6. Consider their communication: Effective communication is key when it comes to managing a property. Ask how the company communicates with landlords and tenants, and how frequently you can expect updates.

By taking the time to compare and choose the right property management company for your needs, you can save yourself time and stress while ensuring your property is in good hands.


Hiring a property management company can be a great investment for property owners, but it’s important to understand the fees involved and make an informed decision when choosing a company to work with. Factors like property size, location, and services needed can all impact the cost of working with a property management company, as can the specific fee structure offered by the company. 

Additionally, it’s important to consider any additional costs or fees, such as maintenance costs or leasing fees, that may be incurred. By carefully evaluating the costs and services offered by different property management companies, property owners can make the best decision for their needs and budget.

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