March 30, 2023

Property Management Fee Calculator & Guide

Calculate how much to expect to pay for property management and decide if hiring a property manager is right for you.

Annual Property Management Fees Calculator







What are Property Management Fees?

Property management fees are fees charged by property management companies for their services. These fees can vary depending on the company and the level of service provided, but they generally fall into one of two categories: ongoing management fees and one-time fees.

Ongoing management fees are charged on a regular basis, typically monthly, and cover the day-to-day management of the property. This can include tasks such as collecting rent, handling maintenance requests, and communicating with tenants. Ongoing management fees are usually calculated as a percentage of the monthly rent collected, typically ranging from 5-10%.

One-time fees, on the other hand, are charged for specific services, such as finding a new tenant or preparing a property for rent. These fees are typically calculated as a percentage of the first month's rent, ranging from 50-100%.

What Do Property Management Fees Include?

The specific services included in property management fees can vary depending on the company and the level of service provided. However, typical services included in ongoing management fees can include:

One-time fees can include services such as:

  • Advertising and marketing the property
  • Conducting tenant screenings and background checks
  • Preparing lease agreements
  • Conducting move-in and move-out inspections

It's important to understand exactly what services are included in property management fees when choosing a property management company. Some companies may offer a basic package of services, while others may offer more comprehensive packages with additional services.

How Are Property Management Fees Calculated?

As mentioned earlier, ongoing management fees are typically calculated as a percentage of the monthly rent collected. For example, if your monthly rent is $1,000 and the property management company charges a 5% management fee, you would pay $50 per month for their services.

One-time fees are typically calculated as a percentage of the first month's rent. For example, if your monthly rent is $1,000 and the property management company charges a 50% lease-up fee, you would pay $500 for their services.

Here is the formula to calculate property management fees and costs as a percentage of income:

Annual Property Management Fees = (Monthly Rent * 12 * (Management Fee Percentage)) + (Estimated Annual Repairs * (Annual Markup on Repairs Percentage))

Property Management Fee Percentage = (Annual Management Fees/ (Monthly Rent * 12)) * 100

It's important to note that some property management companies may also charge additional fees for specific services, such as maintenance or repair services. These fees should be clearly outlined in the management contract.

Conclusion

Property management fees are a cost to consider when deciding whether to hire a property management company. They can vary depending on the company and the level of service provided but generally include ongoing management fees and one-time fees. Ongoing management fees are typically calculated as a percentage of the monthly rent collected, while one-time fees are typically calculated as a percentage of the first month's rent. It's important to understand exactly what services are included in property management fees and any additional fees that may be charged.

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