Property management companies typically charge a monthly percentage, around 8% to 12% of the monthly rent as a management fee, which is usually taken out of the gross collected rent every month. Usually, property managers will also charge a leasing fee to find, screen, and place a tenant. Below is a full breakdown of potential costs a property management company may charge, and what to expect.
The information provided in this article is for general informational purposes only and does not constitute financial or professional advice. Property management fees vary widely based on location, property type, service scope, and market conditions. The figures discussed here are general industry ranges and may not reflect current pricing in your specific area. For an accurate quote tailored to your property, please contact West Shore Property Management directly or consult a qualified property management professional.
What Types of Fees Do Property Management Companies Generally Charge?
Monthly Management Fees
The most common fee a property management company charges is a monthly management fee. This is typically between 8% and 12% of gross monthly rents. Additional rent like pet rent usually falls underneath this category as well.
This is the base cost that property management companies charge to perform functions such as tenant communications, financial reporting, enforcing the lease, handling utility payments, and much more.
Leasing Fees
Most residential property management companies will charge a leasing fee to market towards, find, screen, and place a tenant. Usually, the calculation for this is based on a percentage of 1 month's rent, which typically ranges from 50% of one month's rent to a full month's rent.
It is vitally important that you look beyond the cost for a fee like this. Ask your property manager the following questions:
- What is their process for marketing your property?
- Does the management company take professional photos?
- What is their process for marketing to, finding, screening, and signing a lease with a tenant?
- What is their average time to lease spaces?
These questions are very important to ask. In this category, and all categories, cheap is not always the cheapest option in the long run, nor is the most expensive automatically the most advanced.
Maintenance Coordination / Markup
Some property management companies will charge a flat or percentage markup on top of the cost of maintenance for coordination. This cost varies widely between companies, so make sure you ask your property manager what they charge.
Most management companies have an agreed-upon maintenance reserve amount, where anything below a certain amount (usually around $500) can be handled automatically without the approval of the owner. This can be adjusted owner to owner depending on if the owner wants to be in control of maintenance or if they would rather let the management company handle a majority of the maintenance.
Leasing Renewal Fees
Most companies charge a leasing renewal fee, where they usually charge a flat fee for signing a lease renewal with a tenant. We have seen this range from $100 to $300.
This is often an overlooked section of good property management. Why? Because a great property manager is one who is thinking proactively about locking in a tenant for a longer period to provide an owner with a more stable return.
This also prevents a tenant from giving a 30-day notice to the owner or manager on a month to month lease. This will give the owner and manager more of a “heads up” if turnover work is needed. In addition, this also gives the property management company the ability to frame lease renewal dates to avoid tough seasons to rent, such as winter or the holiday season where people are less likely to move.
This small cost can save owners thousands of dollars in its correct application.
Eviction Coordination
Some property management companies will have a set fee or hourly rate in order to handle the eviction process. This fee varies depending on the property management company.
Other companies will take the approach that they will handle the eviction process and just be reimbursed for the hard costs for evictions (primarily the filing fees).
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