Property management cost includes a range of fees tied to services like leasing, maintenance, inspections, and financial reporting. Understanding these charges up front helps you avoid budget surprises and spot value over fluff.
Hiring a property manager should simplify your life…not make you second-guess where your money is going. Yet many property owners end up blindsided by unexpected charges, unclear service terms, or poor communication after signing on the dotted line.
When your investment is hundreds of miles away, trust matters. Knowing exactly what you’re paying for, and why, gives you the clarity and control you need to protect your property and your profits. Here’s how to make sense of the costs and avoid getting stuck with the wrong contract.
What Makes Up Property Management Fees?
Property management fees usually come as a percentage of the monthly rent collected. This fee covers the core responsibilities of managing a rental, which often include rent collection, communication with residents, basic maintenance coordination, and handling service requests.
The type of property matters. Single-family homes often have simpler setups, while multifamily units usually need more oversight. That affects pricing.
So does location. Fees tend to be slightly higher in areas with lower rent, because there’s less monthly income to pull from. Some companies might reduce the rate for larger portfolios, since managing several homes under one owner can streamline costs.
In a way, pricing models vary as much as the services offered. Some companies charge a flat percentage and bundle everything together. Others offer tiered service plans or break out each cost line by line.
The Breakdown of Property Management Cost
Outside of the core monthly fee, there are other property management expenses to keep in mind. These are typically billed separately, depending on what the company handles for you.
Onboarding or Setup Fees
This one-time fee helps cover the cost of getting started. It might include the initial inspection, photo documentation, lock changes, system setup, and syncing your property with the company’s internal tools. It also covers creating your owner portal and preparing the property listing if needed.
Leasing Fees
Most companies charge when they place a new resident in your home. The fee usually covers:
- Advertising the rental
- Showing the property
- Screening applicants
- Collecting deposits
- Preparing the lease
These tasks require time and attention, which is why leasing fees tend to be higher than other line items.
Renewal Fees
When a resident chooses to renew, companies may charge a lease renewal fee. This helps cover the paperwork, updated screening, rent adjustment evaluation, and any inspections required. Renewals help reduce turnover, so while there’s a fee, you’re saving on vacancy loss.
Maintenance Coordination or Markups
If maintenance isn’t handled in-house, management companies often add a markup to vendor invoices. This is meant to cover the time spent sourcing vendors, scheduling work, verifying completion, and following up with residents.
At Reedy & Company, we have our own maintenance division, with over 40 technicians and a 7,000 sq ft supply warehouse. That means fewer markups, quicker service, and tighter control over quality.
Eviction Support Fees
Evictions aren’t common with good screening, but they do happen. When they do, expect to pay extra for court filing, legal prep, and the physical removal process if needed. Some companies charge flat fees, while others bill hourly or per step.
Vacancy or Admin Fees
Some managers continue charging a reduced monthly fee even when your unit is vacant. This covers tasks like fielding inquiries, preparing the home for showings, and checking on the property. Others might bill a flat admin fee for things like paperwork or document storage.
What’s Typically Included in Full-Service Property Management?
A full-service property management plan covers more than just rent collection. It handles the day-to-day operations that allow a property to stay compliant, well-maintained, and profitable without the owner needing to be involved in every detail.
A typical full-service property management plan usually includes the following:
- Marketing and resident placement
- Rent collection and delinquency follow-up
- Routine inspections with status updates
- Scheduling and managing maintenance work
- Monthly and year-end financial reports
- Legal notices and lease enforcement
What to Look for in a Property Management Contract?
Contracts vary, but they should be clear and complete. All property management fees and optional charges should be listed in writing. The contract should also explain which services are included, how maintenance is handled, and what happens if you cancel.
It’s a good idea to ask about:
- Minimum contract length
- Notice period for ending services
- How and when communication is sent
Clear contracts make budgeting for property management a lot easier and help you avoid surprise fees later.
Frequently Asked Questions
Are Property Management Fees Tax-Deductible?
Yes. Most ongoing property management expenses, including leasing and repair coordination, are tax-deductible as business costs. Still, speak with a tax advisor to confirm how this applies to your return.
How Often Will I Be Charged Additional Fees?
That depends on the company and the property’s condition. At Reedy, many services are built into your standard plan. Extra charges come up mostly for repairs, vacancies, or legal action.
Is There a Difference in Cost for Managing Multiple Properties?
Yes. Many firms offer discounted rates or bundled pricing for portfolios. That can make the cost of property services per unit lower, especially for multifamily homes.
Can I Switch Management Companies if I’m Not Satisfied?
Yes, though you’ll need to follow your contract. Look for clauses that mention termination fees, notice periods, and transfer procedures.
Some signs it might be time to switch include:
- Unclear reporting or inconsistent updates
- Slow maintenance responses or resident complaints
- Unexpected fee increases without explanation
Confidence Starts With the Right Partner
Understanding your property management cost gives you the power to make smarter decisions, avoid hidden fees, and get more from your investment. Every fee should reflect a service that protects your property or improves your returns.
Reedy & Company delivers this value with unmatched transparency and in-house support. We offer dedicated leasing teams, in-house maintenance, a 7,000 sq ft supply warehouse, and full accounting services, all under one roof. With over 3,500 properties under management, we’ve built the systems owners need.
Contact us today and let’s talk about how we can simplify your management and boost your bottom line.
