A company that provides property management services helps landlords manage their rental property for a price. Fees will vary based on a variety of factors, such as property-type and services provided. Below is a breakdown of the fees property managers may charge.

understanding the most common property management costs | Understanding the Most Common Property Management Costs

Different Factors That Affect Property Management Costs

There is typically not a set price that a property management company will charge to manage your property. The fees will depend on a number of factors, including:

Analysis of Property Management Fees

Initial Setup Fee

This is the fee a property management company might charge to set up your initial account with their company. Not all companies charge this fee, but it is usually $500 or less if they do. This fee might also include a property inspection cost to evaluate the condition of your property, as well as costs to notify tenants that they will be managing the property.

Monthly Maintenence Management Fee

Most property managers will charge a monthly fee to manage your property. How this fee is calculated and what services the fee includes should be specified in the contract you sign with the property management company. Some companies charge a higher monthly management fee, but that fee may include more of the necessary services needed than a company that charges a lower monthly fee and bills for additional services separately.

A property management company may charge a flat fee to manage your property or a percentage fee:

Tenant Placement Fee

A property manager may charge an additional fee for placing tenants in your property. Again, this could be a flat fee or a percentage of the rent collected. Half a month’s rent or even a full month’s rent is typical.

This fee can include various things like advertising costs to find tenants, tenant screening, move-in procedures, and preparing the lease agreement. Depending on the contract’s terms, this fee may be refunded to the property owner if the tenant breaks their lease early or is evicted.

Maintenance Fee

Maintenance fees are usually included as part of the monthly management fee. This could include keeping common areas clean, taking out garbage and snow and leaf removal. If a specific repair needs to be made, the cost of the repair will be deducted from the reserve repair fund.

Vacancy Fee

A fee for vacancies could also be included in the property management contract. This could be a one time fee of one month’s rent upfront or it could be a fee for each unit that is vacant, such as $50 per unit.

Early Termination Fee

If the property management contract is broken early, you will often have to pay an early termination fee. Based on the terms of the contract, this fee could vary greatly. You may only be responsible for paying one month of additional management fees or you could be taken to court for breach of contract.

Eviction Fee

If you want a property manager to handle tenant evictions, you will have to pay for it separately in most cases. For each eviction, you can expect to pay a few hundred dollars, plus any court costs associated with the eviction process.