How Much Does Property Management Cost? Fees Explained for Landlords & Investors
Understanding Property Management Costs
One of the most common questions landlords and real estate investors ask is: how much does property management actually cost?
The short answer is that property management fees are fairly standard once you understand how most companies structure their services. The confusion usually comes from not realizing that management companies typically offer more than one type of service.
In this article, we break down the most common property management fees, what’s included, and what landlords should look for when comparing companies.
Two Types of Property Management Services
Most property management companies offer two primary service options:
Tenant Placement Only
This option is designed for landlords who want to manage their rental property themselves but need help finding and placing a qualified tenant.
Full-Service Property Management
This option includes tenant placement plus ongoing management after the tenant moves in, such as rent collection, maintenance coordination, and lease enforcement.
Understanding which service you need is the first step in understanding the cost.
Are There Upfront or Sign-Up Fees?
In most cases, property management companies do not charge onboarding or sign-up fees. Similar to a for-sale real estate listing, fees are typically only paid once the property performs and a tenant is successfully placed.
This performance-based structure helps align incentives between the landlord and the property manager.
How Much Does Tenant Placement Cost?
For tenant placement only, most property management companies charge the full first month’s rent based on the advertised rental price.
This fee usually includes:
- Marketing the rental property
- Hosting and coordinating showings
- Tenant screening and background checks
- Lease preparation
- Move-in documentation and condition reporting
Tenant placement services are ideal for landlords who are comfortable with day-to-day management but want professional screening and leasing support.
How Much Does Full-Service Property Management Cost?
For landlords who choose full-service property management, the tenant placement fee is often discounted.
For example, many companies charge around 50% of one month’s rent for tenant placement when the owner signs up for full management, instead of the full 100%.
In addition to placement, full management includes a monthly management fee, which typically ranges from 8% to 10% of the monthly rent in many markets.
This ongoing fee covers the continued management of the property after the tenant moves in.
Other Property Management Fees to Be Aware Of
Beyond placement and monthly management fees, landlords should carefully review the management agreement for additional charges.
Common fees may include:
- Maintenance coordination or repair markups
- Annual or periodic property inspections
- Lease renewals or administrative fees
It’s also common for property managers to retain late fees or notice posting fees charged to tenants. These policies vary by company, which is why reviewing the agreement in detail is important.
What Matters More Than the Percentage
When comparing property management companies, the lowest percentage isn’t always the best option.
Landlords should focus on:
- What services are included
- How tenant placement is handled
- How maintenance is managed
- How fees are structured and disclosed
A clear, transparent fee structure often matters more than a small difference in percentage.
Final Thoughts for Landlords and Investors
Property management pricing doesn’t have to be complicated. Once you understand the difference between tenant placement and full-service management, it becomes much easier to compare options and make an informed decision.
Whether you choose to self-manage or hire a property management company, knowing how fees work helps protect your investment and set realistic expectations.
Watch the Full Breakdown
Below is a video where we walk through property management fees step by step and explain how they work in real-world situations.
