Management Cost Transparency

Core Services and Fees

The primary fee a landlord pays is typically the monthly management fee. This fee covers the day-to-day operations and is the most common way property managers are compensated.

  • Monthly Management Fee: This is the ongoing charge for general management services, usually calculated in one of two ways:
    • Percentage of Rent: The most common model, this fee ranges from 6% to 12% of the monthly rent collected. For example, if the rent is $2,000 and the fee is 8%, the landlord pays $160 per month. This aligns the manager’s interest with the landlord’s, as they are motivated to keep the property rented and at a competitive rate.
    • Flat Fee: Some managers charge a fixed monthly rate, regardless of the rent amount. This can range from $100 to $200 per unit per month. This model provides predictable costs, which can be beneficial for budgeting, especially for high-rent properties.

Services typically included in the monthly management fee:

  • Rent Collection and Financial Management: Property managers handle all aspects of rent collection, including automated online payment systems, and act as the point of contact for late payments. They also provide regular financial statements and reports, and can handle bill payments for the landlord.
  • Tenant Relations and Communication: They serve as the primary contact for all tenant inquiries, complaints, and requests, including after-hours and emergency calls. This shields the landlord from dealing with daily tenant issues.
  • Routine Maintenance and Repairs Coordination: Property managers coordinate and oversee routine and emergency maintenance to preserve the property’s value. They often have relationships with vetted contractors, which can result in better pricing and quicker service. They typically handle work orders and ensure jobs are completed properly.
  • Legal and Compliance Matters: They stay up-to-date on federal, state, and local landlord-tenant laws and fair housing regulations. This helps landlords avoid costly legal disputes and ensures all lease agreements and eviction procedures are handled correctly.

Additional Fees to Expect

Beyond the monthly management fee, landlords should be aware of other potential costs, which are often separate and only incurred when specific services are needed.

  • Leasing/Tenant Placement Fee: This is a one-time fee charged when a property manager finds and places a new tenant. It typically costs 50% to 100% of one month’s rent. This fee covers all of the marketing and tenant-finding services, which include:
    • Property Marketing: Conducting a market analysis to set a competitive rental price, taking professional photos and videos, and listing the property on various rental websites.
    • Property Showings: Handling all inquiries and scheduling and conducting showings for prospective tenants.
    • Thorough Tenant Screening: This is one of the most significant benefits, as a proper screening process minimizes the risk of a bad tenant. It includes background and credit checks, verifying employment and income, and contacting previous landlords for references.
    • Lease Preparation: Drafting and finalizing a legally compliant lease agreement.
  • Maintenance Markup: Some property managers add a markup of 10% to 25% on top of a vendor’s invoice for maintenance and repairs. This covers the cost of coordinating the work and managing their network of contractors.
  • Eviction Fees: If a tenant must be evicted, a property manager will charge for the time and legal costs associated with the process. This can be a flat fee (often $200-$500) plus court and legal expenses.
  • Initial Setup/Onboarding Fee: A one-time fee when you first sign up with a management company, ranging from $0 to $500, to cover the initial property inspection and account setup.
  • Reserve Fund: Most management companies require landlords to maintain a reserve fund (typically $250-$1,000 per property) for emergency repairs and day-to-day expenses. This is the landlord’s money, held in trust, not a fee.

Justifying the Cost

While the fees can seem high, a property manager’s cost is often justified by the value they provide. They help a landlord by:

  • Minimizing Vacancy Rates: Their expertise in marketing and pricing can reduce the time a property sits empty.
  • Securing High-Quality Tenants: Their screening process helps find reliable, long-term tenants who pay rent on time and take care of the property, avoiding costly turnovers and evictions.
  • Saving Time and Stress: They handle all the day-to-day work, emergency calls, and tenant disputes, freeing up the landlord’s time.
  • Protecting Your Investment: Regular inspections and proactive maintenance preserve the property’s condition and value over the long term.
  • Ensuring Legal Compliance: Avoiding a single legal mistake can save thousands of dollars and immense stress.

Ready to Get Started?

If you’re looking for a great property manager, it’s important that you find someone who is a good fit for you. When you’re ready to talk, please submit the “Contact Me” form, text, call, email or book online.