Property management fees vary significantly across companies, making apples-to-apples comparisons challenging. Understanding fee structures helps you evaluate true costs and avoid surprises. This guide breaks down common pricing models, what should be included, and how to assess value rather than just price.
Common Fee Structures
Percentage-Based Fees
The traditional model charges 8-10% of collected rent monthly. For a $3,500/month rental, this means $280-350 monthly or $3,360-4,200 annually. Pros include costs that scale with property performance. Cons include higher costs for premium properties and potential conflict of interest (managers benefit from higher rents even if that extends vacancies).
Flat-Fee Pricing
Growing in popularity, flat-fee models charge a fixed monthly amount regardless of rent—typically $150-250 in the Bay Area. Pros include predictable costs, better value for higher-rent properties, and no penalty for rent increases. Cons include potentially higher relative cost for lower-rent properties.
Hybrid Models
Some companies combine approaches—perhaps a lower percentage plus fixed fees for specific services, or tiered pricing based on property type.
Additional Fees to Expect
Leasing/Placement Fees: Many managers charge 50-100% of one month's rent to place new tenants. For a $3,500 rental, that's $1,750-3,500 per placement. Some flat-fee managers include placement in their monthly rate.
Lease Renewal Fees: Some charge $100-300 to renew existing tenants. This creates misaligned incentives—managers benefit from turnover.
Maintenance Markups: Some managers add 10-20% to vendor invoices. Others pass costs through at actual rates.
Watch For Hidden Fees: Setup fees, annual administrative fees, inspection fees, eviction coordination fees, and early termination penalties can significantly increase actual costs. Always request a complete fee schedule before signing.