How Much Are Property Management Fees?

Whether you're a property owner looking to hire a property management company or you're considering becoming one, you need to know the costs involved.

Understanding property management fees is crucial for anyone in the real estate game. But the question is: how much will these fees cost, and how can you be sure that you're investing in the best property manager?

Let's break down everything you need to know about property-related fees, from what's typical to what services you can expect. We'll also go over what to expect for each state, so you can make the best decision for your real estate portfolio no matter where you are.

Before we dive into the nitty-gritty of costs, let's start with the basics.

What are Property Management Fees?

Property management fees are the charges that property management companies levy for their services. These fees compensate the property manager or management company for handling the day-to-day operations of your rental property.

But what exactly do these fees cover? Typically, property management services include many of the typical management processes, plus a few unique use cases depending on the property:

• Marketing your property to potential tenants
• Screening and selecting tenants
• Collecting rent
• Handling maintenance and repairs
• Dealing with tenant complaints and issues
• Managing property finances
• Ensuring compliance with local laws and regulations

As you can see, property managers wear many hats, and their fees may rise or fall depending on all of the above factors.

Related: Collect Rent Online: A Guide to Online Payment Options

What to Expect: Typical Fees

Now, let's talk actual numbers.

The truth is, there's no one-size-fits-all answer. These fees can vary widely depending on several factors, including:

• The location of your property
• The type of property (single-family home, multi-unit building, commercial property)
• The range of services provided
• The overall condition and value of the property

That said, there are some typical fee structures you're likely to encounter:

1. Monthly Management Fee

This is the most common type of fee, usually calculated as a percentage of the monthly rent collected. On average, these fees range from 8% to 12% of the monthly rental value.

For example, if your property rents for $1,500 per month, you might pay between $120 and $180 in monthly management fees.

Some property management companies, especially in urban areas or for high-end properties, might charge a higher fee. Others might offer a flat fee, which can be advantageous for higher-rent properties.

2. Leasing or Tenant Placement Fee

When a property manager finds and places a new tenant in your property, they often charge a separate leasing fee for this service.

This fee typically ranges from 50% to 100% of one month's rent. So, if your property rents for $1,500 per month, you might pay between $750 and $1,500 for tenant placement.

3. Vacancy Fee

Some companies charge a vacancy fee even when your property is unoccupied.

This fee compensates them for continuing to market the property and handle its maintenance. Vacancy fees are less common and are typically a flat rate lower than the regular monthly management fee.

4. Maintenance Fees

While routine maintenance is usually covered in the monthly management fee, some companies charge extra for coordinating repairs or renovations. This might be a flat fee or a percentage of the repair cost, often around 10%.

5. Lease Renewal Fee

If a tenant decides to renew their lease, some property managers charge a lease renewal fee for handling the paperwork and negotiations. This is usually a flat fee, often equivalent to 25-50% of one month's rent.

6. Eviction Fee

In the unfortunate event that a tenant needs to be evicted, many property management companies charge an additional fee to cover their time and effort in handling the eviction process. This can range from $500 to $1,000 or more, depending on the complexity of the case.

Related: Rental Application Fees: The Ultimate State-by-State Free Guide

How Much Are Property Management Fees?

So, how much can you expect these fees to be? Remember, these are averages and can vary significantly based on your location and property type:

Let's put this into perspective with an example.

Say you own a rental property that generates $2,000 in monthly rent. Over the course of a year, assuming no vacancies or evictions, you might pay:

This works out to about 20% of your annual rental income. While this might seem high, remember that a good property management company can often command higher rents, reduce vacancies, and save you money on maintenance in the long run.

Property Management Fees By State

Since living costs vary greatly from state to state, it's common that high-demand rental markets such as California and New York will have management fees closer to 8-12% and higher, while lower cost rental areas like Ohio and Arkansas will typically be in the lower 6-10% range.

Here's a snapshot of what landlords can expect in each state.

Property Management Fees Alabama

In Alabama, this range is typically 8–12% of monthly rent. Smaller markets often trend toward the higher end of that range due to lower average rents.

Property Management Fees Alaska

Fees generally fall between 8–12% of rental income in Alaska, though remote markets may vary. Geographic challenges and limited inventory can influence pricing in certain areas.

Property Management Fees Arizona

Owners can expect a typical range from 6–10% of rental income in competitive metro areas. Higher rental prices in cities like Phoenix often allow for slightly lower percentage rates.

Property Management Fees Arkansas

Arkansas landlords pay between 8–12% of monthly rent. In markets with lower rent averages, management companies may price closer to the upper end of that range.

Property Management Fees California

California rental owners typically pay 6–10% of monthly rent, especially in higher-rent metros. Because rental prices are stronger statewide, percentage rates often sit on the lower end compared to Midwest markets.

Property Management Fees Colorado

Colorado landlords pay generally between 7–10% of monthly rent. Competitive rental markets in major cities tend to keep pricing within that narrower band.

Property Management Fees Connecticut

Connecticut rental owners typically pay between 7–10% of rental income. Higher-income suburban markets often trend closer to the lower end of that range.

Property Management Fees Delaware

Delaware landlords pay usually 8–12% of monthly rent. Rates can vary slightly depending on local competition and property type.

Property Management Fees Florida

Florida property managers charge anywhere from 8–12% of rental income for long-term rentals, with higher rates in vacation markets. Short-term rental management can exceed 15% due to higher turnover and operational demands.

Property Management Fees Georgia

Georgia landlords pay between 8–12% of rental income for rental management. Larger metro areas often trend closer to 8–10% due to stronger competition.

Property Management Fees Hawaii

Hawaii rental owners can expect ranges from 8–12% of monthly rent, though short-term rentals may exceed 20%. Island-specific demand and tourism can significantly impact pricing structures.

Property Management Fees Idaho

Idaho landlords pay generally 8–12% of monthly rent. Growing rental demand in certain cities has made pricing more competitive in recent years.

Property Management Fees Illinois

Illinois investors encounter ranges from 7–10% of rental income, especially in higher-rent markets. In smaller markets, percentages may rise slightly due to lower rent averages.

Property Management Fees Indiana

Indiana landlords pay between 8–12% of monthly rent for rental management. Mid-sized cities often land toward the middle of that range.

Property Management Fees Iowa

Iowa rental owners encounter 8–12% of monthly rent for rental management. In many areas, separate leasing fees are charged in addition to monthly management.

Property Management Fees Kansas

In Kansas, landlords can expect to pay anywhere from 8–12% of monthly rent. Smaller markets often trend toward the higher end of that range.

Property Management Fees Kentucky

If you own property in Kentucky, expect to pay anywhere between 8–12% of your monthly rent. Leasing fees are commonly charged separately from ongoing management.

Property Management Fees Louisiana

In Louisiana, landlords pay from 8–12% of monthly rent, depending on market conditions. Insurance and storm-related risks can also influence overall service costs.

Property Management Fees Maine

Fees for Maine rental owners generally range from 8–12% of rental income. Seasonal rental demand in certain areas may impact pricing structures.

Property Management Fees Maryland

In Maryland, landlords pay typically between 7–10% monthly rent for management. Higher-rent metro areas often sit closer to the lower end of that range.

Property Management Fees Massachusetts

For Massachusetts landlords, fees typically range from 7–10% of monthly rent. Competitive rental markets often keep percentage rates steady.

Property Management Fees Michigan

Michigan portfolio owners can expect between 8–12% rental income in metro areas. Smaller markets often trend slightly higher due to lower rent averages.

Property Management Fees Mississippi

Mississippi landlords typically pay a range of 9–12% of monthly rent. Because average rents are lower in many markets, management companies often price toward the higher end of that range to maintain margins.

Property Management Fees Missouri

Missouri rental owners generally pay between 8–11%. Larger metro areas like Kansas City and St. Louis often trend slightly lower than smaller markets.

Property Management Fees Montana

Montana landlords can expect 8–12% of monthly rent. In smaller or rural markets, pricing may lean toward the higher end due to limited competition.

Property Management Fees Nebraska

In Nebraska, property managers charge between 8–12% of rental income. Mid-sized cities may see rates closer to 9–11%, while smaller towns trend higher.

Property Management Fees Nevada

Nevada landlords typically pay 7–10% of rental income in long-term rental markets. In vacation-heavy areas, short-term rental management can exceed 15%.

Property Management Fees New Hampshire

New Hampshire rental owners generally pay from 8–11% of monthly rent. Higher-rent areas may see percentages on the lower end of that spectrum.

Property Management Fees New Jersey

In New Jersey, landlords typically pay between 7–10%. Because rental prices are higher statewide, percentage rates often sit on the lower end compared to Midwest markets.

Property Management Fees New Mexico

In New Mexico, rental owners generally pay from 8–12% of monthly rent. Smaller metro areas often trend toward the higher end of that range.

Property Management Fees New York

Fees in New York typically range from 6–9% in higher-rent markets. In upstate regions, percentages may rise due to lower rental averages.

Property Management Fees North Carolina

In North Carolina, landlords usually pay between 8–11%. Strong investor activity in major metros often keeps pricing competitive.

Property Management Fees North Dakota

In North Dakota, landlords typically pay 9–12% of monthly rent. Lower population density and smaller rental inventories can influence pricing.

Property Management Fees Ohio

Ohio landlords generally pay anywhere from 8–12%. Mid-sized cities often land closer to 9–11%.

Property Management Fees Oklahoma

In Oklahoma, landlords are charged 8–12% of monthly rent. In many markets, leasing fees are charged separately.

Property Management Fees Oregon

Fees in Oregon state vary for rental owners, generally ranging from 7–10% of rental income. In higher-demand metro areas, rates may sit closer to the lower end.

Property Management Fees Pennsylvania

In Pennsylvania, landlords are charged between 7–10% in larger cities and 8–12% in smaller markets.

Property Management Fees Rhode Island

Fees in Rhode Island generally range from 7–10% of monthly rent, consistent with other Northeast markets.

Property Management Fees South Carolina

In South Carolina, landlords are charged between 8–12%, with competitive metro areas trending closer to 8–10%.

Property Management Fees South Dakota

States like South Dakota charge an average of 9–12% of monthly rent.

Property Management Fees Tennessee

Tennessee landlords can expect a range from 8–12% of rental income. Larger metro areas often sit toward the lower end of that range.

Property Management Fees Texas

In Texas, landlords may be charged 8–12%, although the wide scale of the Lone Star state can mean wide variation from city to city.

Property Management Fees Utah

In Utah, landlords typically are charged 7–10% monthly rent in higher-rent metro markets.

Property Management Fees Vermont

In Vermont, fees fall between 8–12% of monthly rent, depending on demand.

Property Management Fees Virginia

Fees in Virginia range from 7–10% of monthly rent, especially in higher-income metro areas.

Property Management Fees Washington

Washington property managers charge 6–9% in competitive rental markets, a lower price compared to other surrounding states.

Property Management Fees West Virginia

West Virginia can expect 9–12% of monthly rent, reflecting lower average rents statewide.

Property Management Fees Wisconsin

In Wisconsin, fees are between 8–12%, with metro markets trending toward the middle of that range.

Property Management Fees Wyoming

In Wyoming, landlords pay 9–12% of monthly rent, particularly in smaller markets.

*These ranges are based on public information from industry benchmarks, National Association of Residential Property Managers, as well as public advertisements from property management companies across each region. Actual fees vary by city, property type, and portfolio size.

Are Property Management Fees Worth It?

When budgets are tight, you might be wondering: are these fees worth it? The answer depends on your individual circumstances, but for many property owners, professional management can be a worthwhile investment:

• Managing a property can be a full-time job. If you have other commitments or live far from your rental property, a management company can be invaluable.
• Property managers are well-versed in local laws and regulations, which can help you avoid costly legal mistakes.
• With professional screening processes, property managers often secure higher-quality, longer-term tenants.
• Established relationships with contractors can lead to faster, more cost-effective repairs.
• Professional management can often result in shorter vacancy periods and fewer late or missed rent payments.
• Dealing with middle-of-the-night emergencies or difficult tenants can be stressful. A property manager handles these issues for you.

Finding the best property management company saves you from the time and stress of managing a property yourself, but you'll quickly see that the fees you pay outweigh the costs of potentially costly legal mistakes or long-term vacancy periods.

A property manager can save you money in the long run with professional screening processes, established relationships with contractors, and timely handling of emergencies and difficult tenants.

How to Evaluate Property Management Costs

When shopping for a property management company, don't just look at the fees. Consider the value you're getting for your money. It's not just the cost, but the benefits that come with hiring a professional property manager.

Here are some tips to consider as you start shopping for the best property management service:

1. Compare services: Make sure you're comparing apples to apples. A company with higher fees might offer more comprehensive services.
2. Ask about additional fees: Get a clear picture of all potential charges to avoid surprises down the road.
3. Check references: Talk to other property owners about their experiences with the company.
4. Consider the company's track record: How long have they been in business? What's their vacancy rate? How quickly do they typically rent out properties?
5. Evaluate their communication: A good property management company should be responsive and transparent.
6. Understand their tenant screening process: This can make a big difference in the quality of tenants you get.

Manage Your Entire Portfolio with TenantCloud

Your rental is an investment. While fees can add up quickly, the right property management platforms can provide value that goes beyond the cost.

Remember, cheapest isn't always best. Look for a property management company that offers a good balance of fees and service. Your future self (and your investment property) will thank you!

Need help managing fees, from security deposits to monthly payments? TenantCloud has built-in accounting software designed for landlords. Manage your bankroll, tenant communications, maintenance requests, and more with our one-stop-shop property management solution.

Frequently Asked Questions

Are property management fees tax deductible?

Yes, property management fees are a legitimate business expense and can be deducted from your rental income on your tax return.

Can I negotiate property management fees?

Yes, some property management companies are open to negotiation, especially if you have multiple properties or a high-value property.

Do all property managers charge a leasing fee?

While it's common, not all do. Some will fold this cost into their monthly management fee.

What's the difference between residential and commercial property management fees?

Commercial fees are lower in percentage terms (4-8% of rent), but because commercial properties rent for more, the dollar amount is higher. Residential fees typically range 8-12% since the rental amount is lower.

Are there any hidden fees I should watch out for?

Always ask for a full list of all fees. Some companies will charge for things like property inspections, financial reporting, or even postage and photocopying.

Remember, when it comes to property management, you get what you pay for. While it's important to keep costs in check, don't sacrifice service for a lower fee. The right property manager can be a valuable partner in your real estate investment journey.