How Much Do Property Managers Charge?

Written by Ricky Nave in Real Estate

Man holding a mini apartment building in his hand

Most property management companies will charge 8-12% of total rent as their fee to manage a residential long-term rental property. However, that doesn’t include the cost of any property repairs that may be necessary, and it also typically does not include leasing commissions. That means if your tenant calls about a toilet malfunction, you’ll be charged for the plumber’s visit on top of the 8-12% of rent collected by the property manager as a flat fee that month. It also means that if your tenant leaves, your property manager will likely charge anywhere from 0.5 to 1 month of rent as a leasing commission for finding and signing a new tenant.

Some property managers will also mark up the cost of repairs so that, for example, if your tenant calls about a toilet malfunction, and a plumber charges $100 to come out and fix it, your property management company may bill you $120 for that visit. Be sure to ask any property manager whether or not they mark up service costs or repairs before you agree to hire them.

Some property managers will also charge an initial onboarding fee (typically a few hundred dollars).

Questions to ask a residential long-term rental property manager before hiring them:

  • What percentage of rent do you charge each month, and what value do I get included for that price?
  • Do you mark up labor or materials for maintenance, repair, or other service calls?
  • Do you charge a leasing commission to find a new tenant after an old tenant leaves? If so, how much do you charge?
  • What is the average time it takes you to fill a vacancy?
  • Do you stay on top of compliance with local rental property licensing, inspections, and regulations?
  • How do you screen tenants? Do you charge any fees for the screening process?
  • Do you optimize tax-adjusted ROI when choosing replacement appliances, HVAC equipment, windows, etc? (This is an important consideration because many appliances, equipment pieces, windows, etc can qualify for tax credits or deductions.)

How much do apartment property managers charge?

If you hire a property manager to manage an entire apartment complex, you will often get a discounted rate. Frequently, a property manager may only charge around 6% of rent to manage an entire large apartment complex. However, this still does not include repairs, maintenance, property taxes, etc.

How much do vacation rental property managers charge?

Vacation property management fees vary a lot more than long-term property management fees. In general, vacation property managers will charge anywhere from 10-30% of total rent. On the low end, that typically includes all customer interaction, Airbnb and VRBO listing management, and coordination with cleaners and maintenance vendors. On the high end, it may also include property maintenance (but not repairs over $200) and possibly even cleaning.

Most frequently, however, cleaning is not included in vacation property management fees. The cleaning company hired by a vacation property management company might be owned by the same person who owns the property management company though, which can sometimes conflict with your best interest as property owner, so it’s worth asking if this is the case before you hire any vacation property manager.

NOTE: It’s not necessarily bad to have the property management company owner also be the owner of the cleaning company. It might actually be good if it means your cleaning gets done on time and on budget reliably. However, where it can go wrong is if there are 3 other cleaning companies just as good which charge half the price, but they aren’t hired because the property manager wants to pay his own cleaning company more money out of your pocket.

Ricky Nave

In college, Ricky studied physics & math, won a prestigious research competition hosted by Oak Ridge National Laboratory, started several small businesses including an energy chewing gum business and a computer repair business, and graduated with a thesis in algebraic topology. After graduating, Ricky attended grad school at Duke University in the mathematics PhD program where he worked on quantum algorithms & non-Euclidean geometry models for flexible proteins. He also worked in cybersecurity at Los Alamos during this time before eventually dropping out of grad school to join a startup working on formal semantic modeling for legal documents. Finally, he left that startup to start his own in the finance & crypto space. Now, he helps entrepreneurs pay less capital gains tax.

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