As a real estate investor, one of the biggest decisions you’ll make is whether to self-manage your rental properties or hire a property manager. And one of the most important questions to research in advance of this decision is, how much do property managers charge? The right choice at each moment in your investing journey depends on your current goals, how dearly you value your own time, and, of course, the incremental costs associated with professional property management.
Property management fees vary based on location, the type of property, and the level of services provided. In this guide, we’ll break down some common residential property management pricing models, including hidden fees and some other less well known tricks of the trade that you’d be wise to consider before deciding whether to hire any particular property manager.
Property Management Pricing Models
1. Percentage-Based Fees
The most common residential property management pricing structure is a percentage of the monthly rent, typically ranging from 8% to 12% of collected rent. This means if your rental property brings in $2,000 per month, you might pay a property manager $160 to $240 per month as a base fee. It also means if your property sits vacant all month, you probably won’t pay a base fee at all.
Pros:
- The manager is incentivized to keep the property occupied and to make sure rent is collected sooner rather than later.
- The fee you pay scales with rental income, making it easier to budget, plan, and actually pay the property management fee.
Cons:
- If your rental commands a high rent, you could pay significantly more than you would with a flat fee model.
- If you have an easy tenant and a low-maintenance property, it can sometimes feel a bit strange to pay a property manager month after month for simply cashing rent checks.
2. Flat-Rate Fees
Some property managers charge a fixed monthly fee instead of a percentage. This typically ranges from $100 to $300 per property per month, regardless of rental income. Of course, a key question to ask with this pricing structure is, “do you still charge the flat fee when the property is vacant?”
Pros:
- Easier to predict expenses.
- More cost-effective for higher-rent properties as the fee doesn’t scale alongside rental income.
Cons:
- Can be expensive for lower-rent properties and will sometimes exceed 12-15% on smaller units in budget locations.
- Less incentive for the manager to maximize timely rent collection.
Common Additional Fees
Leasing Fee (Tenant Placement Fee)
Most property managers charge a leasing fee when filling a vacancy, typically ranging from 50% to 100% of one month’s rent. Some charge a flat fee of $500 to $1,500 instead.
This fee covers:
- Advertising and marketing
- Showing the property
- Screening tenants
- Preparing lease agreements
Lease Renewal Fee
Some property managers charge a fee for renewing an existing tenant’s lease, usually around $100 to $300 or 25% to 50% of one month’s rent. This fee is sometimes negotiable so it’s definitely worth pushing back. It’s nearly always in everyone’s interest to make sure tenants are renewed as vacancies are costly for both sides in terms of time, hassle, and lost revenue. Exceptions of course exist for situations in which a tenant is troublesome or is paying a significantly below-market rent and is unwilling to pay market rent on a renewal.
Maintenance and Repair Markups
Many property management companies mark up maintenance and repair costs by 5% to 20%. For example, if a plumbing repair costs $300, a 10% markup means you’ll pay $330, of which $30 will be pocketed by the property manager in return for coordinating the work. This is all well and good when it’s clearly disclosed up front and everyone knows it’s part of the expected fee structure, but in our experience fees like these are sometimes buried in the fine print of the contract. It’s always best to just ask directly via email or text so you have a record of the conversation and can make a fully informed decision.
Two other gotchas to watch out for around maintenance are…
1) When a property manager expects to earn a markup fee on maintenance work, they’re not exactly incentivized to find you the best deal. In fact, the opposite is true. The more you spend, the more your PM earns. This can be effectively managed by insisting that the property manager obtain at least two (sometimes more) competitive bids for all repair or capital contracts over a certain amount. You’ll need to work out the thresholds yourself as the appropriate numbers vary greatly based on property location, labor rates, materials costs in your area, etc.
2) The other gotcha is that some property managers have rebate (aka kickback) arrangements in place with certain preferred vendors. This means that a vendor might bill your PM $500 for a completed repair and then “rebate” your PM $50 at the end of the month, per their agreement. The PM still withholds the full $500 from your distribution the next time a tenant pays rent, which nets the PM a “sneaky” $50 fee. We hate this type of fee because it’s rarely disclosed, reduces your returns, and sometimes leads PM down a rabbit hole of moral hazard in which they end up awarding your maintenance projects to whichever local vendors offer them the highest rebates.
Finally, some property managers have in-house maintenance teams and charge a flat hourly rate instead of outsourcing repairs. Some larger managers get the work done very efficiently with this structure, but it does require a certain scale to make it work.
Vacancy Fees
Some companies charge a vacancy fee to cover inspections and upkeep while the property is unoccupied. This can be a flat fee (e.g., $50 to $100 per month) or a reduced percentage of the expected rent. Most property managers have moved away from this fee in recent years in an attempt to better align incentives between the owner and the PM.
Eviction Coordination Fee
If a tenant needs to be evicted, property managers may charge a fee ranging from $200 to $500, plus court filing costs and attorney fees.
In our minds, this fee is totally justified when it’s a tenant you placed years ago and the PM was otherwise not involved in the leasing process. We definitely recommend pushing back on this fee and carving out situations where the PM screened and placed the tenant. Tenant placement is a core PM responsibility and they nearly all charge a leasing success fee for this activity. If a tenant placed in your property by the PM ends up having to be evicted during the course of your property manager’s oversight of the property, we think the PM should absorb the bulk (if not all) of the costs associated with the eviction.
Fees Charged to the Tenant Directly
This category of fees is sometimes known to residents as the dreaded “admin fee.” It’s a relatively new innovation and is generally unpopular with both residents and experienced owners/investors, for good reason. Essentially, the PM bills the tenant an additional monthly fee, usually something like $29 or $39 on top of the rent, under the guise that it covers things like maintenance coordination, PM office overhead, or some other vague generic category of expenses.
The big problem we have with this type of general fee on the tenant is that PMs are supposed to be making their money on the contract terms negotiated with the property owner. Period. Once a PM starts to deviate from that philosophy by looking to generate revenue directly from tenants or vendors or other partners, they can get a bit confused about which one is their actual customer. And that usually doesn’t go well for the owner.
Note also that admin fees like this are supposed to be disclosed up front to all potential tenant applicants and are often stipulated in the lease contract as well.
Either way, you should ask directly when interviewing potential property managers whether they charge the tenant an admin fee. If they do, you may want to insist that they either drop the fee for your properties or that they remit the entire fee to you every month. Many PMs will agree to one of these options.
And the ones that won’t? Well, they are waving a big red flag in your face.
Other Possible Fees
- Onboarding Fees – One-time setup fees ($100 to $500 per property)
- Inspection Fees – Charges for annual or move-in/move-out inspections ($75 to $200 per inspection)
- Advertising Fees – Some managers charge separately for professional photos or premium listings
Should You Hire a Property Manager or Self-Manage?
Reasons to Hire a Property Manager:
✅ You own multiple properties and want passive income.
✅ You live far from your rental property.
✅ You don’t want to handle tenant screening, maintenance, or legal issues.
✅ You value professional expertise and compliance with local rental laws.
Reasons to Self-Manage:
✅ You want to maximize cash flow by avoiding management fees.
✅ You have the time and skills to handle tenant issues and maintenance.
✅ You enjoy being hands-on with your investments.
✅ Your rental is close to where you live, making it easy to oversee.
Final Thoughts
Hiring a property manager can be a great way to streamline your real estate investment operations and/or free up time to pursue portfolio growth, but it comes at a cost. Understanding the fee structures and potential additional charges can help you screen property manager candidates effectively in the service of making informed decisions that you’re less likely to regret down the road.
For investors with multiple properties, high-commitment day jobs, a growing family, or anyone in search of a more passive investment approach, a property manager is often worth the expense. By asking educated questions up front you’ll get clearer answers to the not-so-simple question, “how much do property managers charge?”