Property Management Fee
The monthly fee charged by a property management company for managing a rental property, typically 6% to 12% of collected rent.
Definition
Property management fees are the biggest recurring expense on a PM managed rental after the mortgage. The industry standard is 6% to 12% of collected monthly rent, with single family rentals usually clustering at 8% to 10% and small multifamily trending toward the 6% to 8% range. Some PMs charge a flat monthly fee instead of a percentage, which can be more or less expensive depending on the rent amount. Most PMs also charge additional fees on top of the base management fee: a leasing fee of one half to one full month's rent for placing a new tenant, a renewal fee of $100 to $300 when an existing tenant renews, maintenance markups of 10% to 20% on contractor invoices, and sometimes a setup fee when you first onboard. Reading the management agreement carefully before signing is critical because the fine print is where PMs make most of their money. Fee benchmarking across your portfolio and against market averages is one of the biggest opportunities investors miss, and it is one of the features Knox flags automatically inside DoorVault's PM Report Card.
Formula
Example
Monthly rent is $1,450. PM charges 8% of collected rent. Monthly PM fee = 1,450 x 0.08 = $116. Plus a leasing fee of $725 (one half month's rent) when a new tenant is placed.
Frequently asked
What is the average property management fee?
8% to 10% of collected rent for single family rentals. 6% to 8% for small multifamily. Flat fee options exist at $100 to $200 per month.
What other fees do property managers charge?
Leasing fees (half to full month's rent), renewal fees, maintenance markups, setup fees, advertising fees, and sometimes eviction coordination fees.
Are property management fees negotiable?
Yes, especially for portfolios of 3 or more properties. Volume discounts are common. Everything in a management agreement is negotiable before you sign.
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