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Hiring a rental property manager can save you time, reduce stress, and help maximize the return on your rental investment. But before choosing one, it’s essential to understand the costs involved.
How much do property managers charge? The simple answer is that it depends on several factors, such as your property’s location, type, and the service you need. Most property management companies charge either a percentage of the monthly rent or a flat monthly fee. Some may even charge additional fees for services like tenant screening, property inspections, and so on.
In this guide, we’ll take you through the most common types of property management fees, explain what affects the property management’s overall cost, help you understand what services are typically included, and how to choose a property manager that fits your needs.
Key Takeaways
- Common types of fees are monthly management fee, tenant placement or leasing fee, lease renewal fee, setup/onboarding fee, and eviction fee.
- A property management cost refers to a fee paid by a homeowner to a property management company for handling day-to-day activities of your rental properties.
- Property manager fee typically falls between 8-12% of collected rent per month, or a flat fee of $100-$350 per unit.
- The property management fees may vary depending upon the location, type/number of property, service provided, and condition & age of rental property.
How Property Management Fees Work & Typical Cost Structure?
Most property management companies usually structure their fees in two categories: either as a percentage of the amount of rent collected or a fixed residential property management fee.
1. Percentage of Monthly Fee
It is the most common pricing model used by many property management companies. Instead of charging a flat monthly rate, the property managers earn a percentage of the rent, typically ranging from 8% – 12% for residential rental properties. The exact percentage entirely depends on various factors like property location, type, number of units, and the level of service provided.
For example, if your rental properties generate $1500 per month and your management agreement includes a 10% management fee, you would pay $150 per month for property management services.
2. Fixed Property Management Fee
Many property management companies charge a fixed monthly fee instead of taking a certain percentage of your rental property income. The fixed fee or flat fee structure is usually based on different factors like the type of property, its size, the number of units, and the services included in the management agreement.
For example, a rental property manager may charge $100 per month to manage a single-family home. Larger homes or multi-unit properties may include higher monthly fees.
3. Additional Fees
- Late Payment Fees: Property managers may charge a fee if a tenant pays rent late. Some rental companies keep all or part of the late fee, while others pass it on to the property owner.
- Leasing/ Tenant Placement Fee: A tenant placement fee, also called leasing service fee, is charged when the property management firm finds a new tenant for a vacant property. It’s usually a one-time fee ranging from 50% to 100% of one month’s rent or a flat fee of $200 to $1000, depending on the market and service provided.
- Maintenance and Repair Fees: Property managers may charge for overseeing repairs and maintenance tasks. Some companies have in-house maintenance teams, while others contract the work out to third-party vendors and charge a 10% to 20% markup on repair & maintenance costs or maintenance coordination fee charged hourly.
- Setup/Onboarding Fees: Some real estate management companies charge a one-time onboarding fee when you first sign a management agreement. This setup fee typically ranges from $100 to $500 and covers tasks such as setting up your account, conducting an initial property inspection, and preparing your property for management.
- Advertising Fees: These fees cover the cost of advertising the property, including listing it on rental websites and conducting marketing campaigns. If charged separately, they typically range from $50 to $300 per vacancy.
- Eviction & Legal Fees: If an eviction process becomes necessary, property management companies may charge $200 to $500, plus court filing and attorney fees, to handle the legal process.
- Vacancy Fees: Few property managers charge a fee while your property is vacant to cover inspections and marketing. These fees typically range from $50 -$150 per month, although not all companies charge them.
- Accounting and Reporting Fees: Property management companies often provide financial reports and statements to property owners. While these are usually included in the management fee, some charge an additional $50 – $200 per year for year-end reporting or tax documents.
- Lease Renewal Fees: Some property management companies charge a lease renewal fee when an existing tenant signs a new lease. This typically ranges from $100 to $300 or 25% to 50% of one month’s rent.
Related Article: Do property managers pay for repairs?
How Much Does a Property Management Company Charge?
A property management company typically charges a monthly fee of 8% to 12% of the monthly rent collected or a flat fee of $100 to $350 per month. However, the monthly base fee is just the starting point; when additional services like tenant placement, maintenance, and renewals are added. The cost can reach up to 15% to 20% of your annual rental income.
| Types of Fees | Other Companies Charge | OKC Home Realty Services |
| Releasing Fee | ½ to 1 full month Rent | $0 |
| Lease Processing Fee | $200 to the owner on top of the leasing fee charged to the owner | $0 |
| Late Fee | Property management Company keeps most or all of the late fees | $0 |
| Maintenance Fee | $60 to $80 an hour | $35 per hour average |
| Setup Fee | $500 | $0 |
- Also, some other property management companies lock you into annual contracts that you just can’t get out of until the contract expires.
- Releasing fee – ½ to 1 full month of rent. This is a tenant signing up for another 12 months. NOT a new tenant.
- Lease processing fee – $200 to the owner on top of the leasing fee charged to the owner. This is in addition to the leasing fee.
- The management company keeps 100% of the late fees from the tenant. That’s right, they don’t pay anything to the owner.
- Charging their technicians $60 to $80 per hour for tasks as simple as repairing a toilet.
- Setup fees, some as high as $500.
As you can see in the table above, OKC Home Realty Services charges nothing for releasing, late fees, or setup fees. And our average charge for maintenance is $35 per hour.
Check out our property management pricing page for a complete breakdown of property management costs in Oklahoma.
Be sure to ask any prospective property management company about potential hidden fees. These may include additional administrative charges for bookkeeping, eviction services (including court representation), or markups on maintenance and repair costs. At OKC Home Realty Services, we don’t charge extra for any of these services, giving you transparent pricing with no surprise fees.
Property Management Costs by State
As we all know, property management costs depend heavily on location, so landlords should expect different fee ranges depending upon the state and local rental market.
| State/Region | Fee Ranges for Rent (%) |
| Arizona | 8-10% |
| Oklahoma | 8-12% |
| Nevada | 8-9% |
| Wisconsin | 7-8% |
| Texas | 8-9% |
| South Carolina | 9-10% |
| North Carolina | 8-9% |
| Washington | 9-10% |
Factors That Affect Cost of Property Management Fees
Several factors can influence how much a property management company charges. Understanding these situations can help you compare quotes and know why a company’s rate may differ from another’s:
Property Size and Type: The size and type of property being managed, such as single-family homes, multi-unit buildings, or commercial properties, influence the complexity of management and associated fees. Larger properties or multi-unit buildings require more coordination, which can increase the overall fee.
Location: The location of a property plays a major role in pricing. Properties in high-demand city areas with competitive rental markets are often seen to have higher fees. In contrast, smaller markets may offer more competitive rates due to lower operating costs and less competition among management companies.
Services Provided: The range of services provided by the property management company influences the management fee structure. Full-service management like tenant screening, maintenance coordination, financial reporting, and legal compliance, typically costs more than basic, as it only covers essentials like rent collection.
Property Condition: A property’s condition and the level of maintenance needs directly affect pricing. Older or poorly maintained rental properties may require more repairs, maintenance, and inspections, which can increase management costs compared to new ones.
Number of Units/Portfolio Size: Managing multiple units or larger portfolios can require more time and resources, which can increase the cost. However, some management companies provide lower per-unit rates for owners with multiple properties.
Market Factors: Local conditions like supply and demand dynamics, prevailing rental rates, and others play a role in incurring the fees for a property. Markets with many property management companies competing for business often see more competitive pricing.
Legal and Regulatory Requirements: Properties in areas with strict landlord-tenant laws, mandatory licensing, or specialized local compliance requirements often come with higher fees, since the manager must dedicate more time to staying current on changing regulations and ensuring your property remains compliant.
Company Reputation and Experience: Company reputation, experience, and expertise affect the fees charged. Well-established and reputable management companies have better records of achievement and command maximum fees.
Local Market Competition: Property management fees may vary depending upon the number of companies available, rental demand, and local market conditions. In areas that have few rental management companies, fees are expected to be higher due to limited competition.
These are some of the key factors that individual property management companies across various locations deal with while setting their rates. It’s advisable to consider these factors with other potential companies before finalizing a choice.
What Services Are Included in Property Management Fees?
Before selecting any property manager, make sure you understand what type of services are included in their fee. A good property management company offers necessary services like rent collection, tenant screening, maintenance coordination, rental property inspection, lease management, eviction assistance, property marketing, financial reports, and help with legal requirements.
Also, check how the management fee is calculated. Some companies charge a percentage of rent collected, while others charge a fixed monthly fee. When a property manager charges a fee based on collected rent, they are motivated to keep your property occupied and make sure rent is paid on time because their income depends on the rent they collect.
Make sure to ask about additional charges such as renewal fees, leasing fees, maintenance markups, or other service costs, so you can know the total cost before signing an agreement.
Struggling to manage your multiple rental properties efficiently? Here is a solution if you have never had a property manager.
How to Compare Property Management Services & Fees
When hiring a professional property manager, you must ensure you choose the right one by considering several factors. Here are some tips to help you choose the right property management company that enables you to maximize your investment:
Look for a Local Company: Choose a property management company near your property, as they will better understand the local market and laws.
Check Referrals and Reviews: Ask for referrals from other property owners or check online reviews to get an idea of the company’s reputation.
Evaluate their Experience: Ask about the company’s experience managing properties similar to yours and how long they have been in business.
Ask about their Services: Inquire about their services, such as tenant screening, rent collection, maintenance and repairs, and legal compliance.
Check their Licenses and Certifications: Verify that the company is licensed and has any necessary credentials to operate in your area.
Ask about their Fee Structure: Inquire about their management fee and any additional fees they charge, such as setup fees, leasing fees, and maintenance fees.
Evaluate their Communication Skills: Ensure the company is responsive when dealing with them.
Look for Red Flags: Watch out for red flags such as disorganization, low occupancy rates, bad reviews, and high costs.
Also Read: Property Managers Duties and Responsibilities
Is Hiring A Property Manager Worth the Cost?
Yes, hiring a property manager is worth the cost for most rental property owners, as long as the fee is reasonable and clearly explained upfront.
A management fee of 8-12%of monthly rent (or a capped rate like 10% up to $100/month) typically costs less than the time, risk, and potential mistakes involved in self-managing by the owner. Self managing a rental unit usually takes 10 to 20 hours a month, doing every tasks like screening tenants, collecting rent, repairs, and staying compliant with landlord-tenant law. If your time is worth more than the hourly cost of that work, you should probably hire a property manager.
It’s especially worth it if you:
- Live far from your rental property
- Own multiple properties or else have a full-time job
- Have no/limited experience regarding leases, screening, or local rental laws
- Want to avoid handling late payments, bad tenants, or evictions directly
It may be a low priority if you live near your property and have time to manage by yourself, and already have a reliable network of contractors.
Beyond the monthly fee, a property manager helps to reduce risks and costly mistakes. A single bad tenant, legal issues, or delayed repair can cost more than the management fees you pay. For many homeowners, the time saved and peace of mind make hiring a property manager a valuable investment.
Recommended Article: Pros and Cons of Hiring a Property Management Company
Conclusion on Property Management Rates
Understanding how much property managers charge is an essential step in choosing the right company for your rental property. Property costs may vary based on your property’s location, type, and the service provided. Choosing the right property manager can save you time, reduce stress, and help protect your investment.
By comparing pricing, services, and experiences, you can easily make a decision that supports your long-term rental goals.
If you are searching for reliable property management in Oklahoma City, contact OKC Home Realty Services today for a free property management consultation. Do what you do best, and let the professional handle the rest for you.
FAQs on Property Management Fees
What percentage do property managers charge during a rental process?
Property managers typically charge a monthly fee between 8% to 12% of the monthly rent collected during the rental process.
Does Property Management OKC ask for any setup fees?
No. OKC Home Realty Services does not ask for any setup fees.
How much leasing fees do property managers charge?
Property managers can charge leasing fees ranging from $200 to first month of rent in Oklahoma
How time-consuming is it to manage a property?
Managing a rental property can be a time-consuming business activity. Performing activities such as finding tenants, tenant screening, regular inspections, dealing with repairs and maintenance, and other aspects of managing properties can take a lot of time, especially if you own several rental properties. Self Managing is not referred to as you are not capable of dedicating dedicated time to rental property management.
Are property management fees tax-deductible?
Absolutely! Property management fees are tax-deductible as operating expenses for your rental property. Learn more about the rental property tax benefits.
Do property managers offer guarantees on tenant quality?
Some property managers offer tenant quality guarantees, meaning they will cover eviction costs if a tenant they placed needs to be evicted within a specific timeframe.
Is it worth paying for property management?
Property management fees are an investment in protecting the value of your property, ensuring tenant satisfaction, and saving up your time for other works.
What is a reasonable management fee?
A reasonable management fee can vary depending on the type of investment or service being provided, but generally, it should be competitive within the industry while also reflecting the value and expertise of the management team.
What should I do if I’m unhappy with my property management company?
If you’re dissatisfied with your property manager, review your agreement for termination clauses as it’s a legally binding contract, document your concerns, and consider discussing issues directly with the management company or you can terminate the property management agreement directly.
Residential and commercial property management fees: What's the differences?
The major difference between residential and commercial property management fees lies in their fee structure, percentage rates, and extra cost. Residential fees typically range from 8% to 12% of monthly rent calculated and follow a percentage-based model. Commercial fees are generally lower, around 4% to 8% of gross rent, but they involve complex calculations like tracking Common Area Maintenance (CAM) and triple-net (NNN) lease splits.
Author
Scott Nachatilo is a licensed real estate broker and Certified Property Manager with over 27 years of experience in Oklahoma’s real estate market. He holds a Master’s Degree in Geology from the University of Missouri and is a proud NARPM member. He is also a co-author of Weekend Warriors Guide to Real Estate (2006). Scott founded OKC Home Realty Services to help landlords and investors across Oklahoma City maximize their returns and enjoy a stress-free property ownership experience.
