Property management pricing in the Bay Area can feel like navigating a maze. One company quotes 8% while another quotes 5%—but the 5% company charges $500 leasing fees, $50 monthly admin fees, and 10% maintenance markups. By the end of the year, you're paying more than the "expensive" company. Understanding transparent pricing isn't just about finding the lowest number—it's about knowing exactly what you'll pay and what you'll receive in return.
The property management industry is notorious for burying fees in fine print. Here are the most common charges that catch landlords off guard:
Many property managers charge 50-100% of one month's rent each time they place a new tenant. For a $3,500/month Bay Area rental, that's $1,750-$3,500 every time your property turns over. With average tenant stays of 2-3 years, this adds $600-1,750 annually to your effective management cost. Some companies charge this fee even for lease renewals.
What to ask: "Do you charge a leasing fee? Does it apply to renewals? What happens if the tenant breaks the lease early—do I pay another fee?"
Some property managers add 10-20% markups on all maintenance work. A $500 plumbing repair becomes $600. Over a year with typical maintenance expenses of $2,000-4,000, you could pay $200-800 extra in hidden markups. This also creates a conflict of interest—the manager profits more when repairs cost more.
What to ask: "Do you mark up vendor invoices? Can I see the original vendor invoice alongside any charges?"
Monthly "admin fees," "technology fees," or "portal fees" of $25-75/month add $300-900 annually. These fees often cover basic services that should be included in management—like online owner portals, accounting, or communication systems. If a company charges separately for technology, ask what you're actually getting.
Some managers charge reduced fees during vacancy (reasonable) while others charge full management fees even when no rent is collected (unreasonable). Worse, some charge "vacancy marketing fees" or "re-rental fees" on top of regular leasing fees.
Charges of $75-150 per inspection for move-in, move-out, or periodic inspections can add up. Properties should be inspected regularly—this is basic property management. Charging separately suggests these essential services aren't included in the base fee.
Fees of $100-300 for preparing or renewing leases are pure profit centers. Lease preparation is standard property management work—charging extra for it is like a restaurant charging for silverware.
To compare property managers fairly, calculate the total annual cost including all fees. Here's a framework:
For a $3,500/month rental with average turnover every 3 years:
The "cheaper" 5% company actually costs $957 more per year!
Transparent property management companies share these characteristics:
If a company won't publish prices, they likely charge different rates to different clients—or they're hiding something. Transparent companies put their pricing online for everyone to see.
A transparent company explicitly lists what's included: tenant placement, rent collection, maintenance coordination, inspections, accounting, etc. If services aren't listed as included, assume they cost extra.
"Starting at 6%" means the real rate is probably higher. Transparent pricing means flat, predictable rates that apply to everyone.
Monthly statements should show exactly what was charged and why. You should be able to see vendor invoices, not just summarized charges.
All fees should be spelled out in a clear contract. If a salesperson says "we don't charge that" but it's in the contract, the contract wins.
Before committing to any property manager, ask these questions to uncover the true cost:
Two main pricing models exist in property management, each with transparency implications:
Traditional percentage pricing (typically 8-12% of rent) creates a misaligned incentive: the manager earns more when your rent is higher. While this might seem beneficial, it also means the manager's income fluctuates with market conditions, potentially incentivizing unrealistic rental rates. Percentage pricing is also inherently less predictable—your costs change with every rent adjustment.
Flat-fee property management charges a fixed monthly amount regardless of rent collected. This creates several transparency benefits: you know exactly what you'll pay each month, there's no incentive for the manager to inflate or deflate rental rates, and budgeting becomes straightforward. Flat fees also tend to benefit owners of higher-rent properties, where percentage fees become disproportionately expensive.