If you are considering working with a property management company, here is a breakdown of the most typical fees and what they cover.

Management Fee

The management fee is the primary cost associated with hiring a property manager. This fee is typically a percentage of the rent collected rather than a flat fee.

For example, if the management fee is 11% of the collected rent, and the tenant pays $1,000 per month, the property manager would receive $110 from that amount.

Since this fee is based on the actual rent received, the property manager only gets paid when the owner does. This ensures that the property manager has an incentive to keep the property occupied and rent payments collected on time.

Leasing Fee

When a property manager finds and places a new tenant in a rental unit, they typically charge a leasing fee. This covers the work involved in marketing, screening applicants, showing the property, and preparing the lease agreement.

Leasing fees are often equal to 50-100% of a month’s rent. This fee helps offset the costs of filling a vacancy and ensuring that a qualified tenant is placed in the unit.

Renewal Fee

When an existing tenant’s lease is set to expire, the property manager will review the lease, discuss renewal options with the owner, and negotiate with the tenant to extend their stay. If the lease is successfully renewed for another 12-month term, a renewal fee is charged.

Renewal fees are typically 10-50% of one month’s rent, with a set minimum charge. This covers the administrative work involved in securing the lease extension, ensuring that the tenant continues to meet qualifications, and avoiding costly vacancies.

Maintenance and Repair Fees

Most property managers offer maintenance and construction services, which can range from routine repairs to major renovations. The way these services are billed depends on whether the work is done by in-house staff or third-party contractors.

• In-House Maintenance – If the management company has its own maintenance team, they may charge based on time and materials for the work completed.
• Third-Party Contractors – If a job requires an outside vendor, the management company will hire an approved contractor and charge the owner the cost of the service plus a markup.

Pet Fees

If a property allows pets, the property manager may charge a pet fee to the tenant. This fee is often split between the property owner and the property manager, as there is additional work involved in screening pets, enforcing pet policies, and conducting inspections.

Late Fees

When tenants fail to pay rent on time, they may be charged late fees. Many property managers retain 100% of the late fees, as the extra effort to collect overdue rent falls on them. This includes sending notices, making collection calls, and following legal procedures to recover unpaid rent.

Final Thoughts

Understanding how property management fees work helps owners evaluate whether professional management is the right fit for their investment properties.

While fees may vary, a well-structured fee system ensures that the property manager and the owner have aligned incentives, leading to better tenant placement, consistent rent collection, and well-maintained properties.

If you have additional questions about property management fees, reaching out to a professional property manager can provide clarity and help you determine the best approach for your rental property.