Property Management Fees
Member since 2024 · 4 posts · 5 votes
Property Management Fees
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Thomas TalbertBusiness Member
Property Manager · Austin, TX · Member since 2024 · 96 posts · 71 votesQuote from @Christian Styles:
This seems to be in the ballpark, but I would have a few follow up questions,
Is this their entire fee structure?
Typically tenant placement is the first month of rent so 100 bucks seems a little on the low side, what are they doing to advertise your property that they are able to do it for only 100 bucks?
I know we typically charge 5 percent of vendor maintenance and repairs but 10 may be the norm in your area. (I'm in Cleveland, OH)
I'm happy to look over your PM agreement if you want an extra set of eyes, always seem to find something of value in those!
Can you tell us a little about the property they would be managing too? That information is helpful when trying to asses fees.
Also, Congratulations on entering the wonderful world of REI! Happy to have you here!
Agreed $100 does seem cheap for a placement fee but 10% is the market down in Austin. I would ask what all goes into their placement fee because they may do the bear minimum and the marketing for the property isn't that great of that $100 is true.
Prime Properties4.4244 Reviews
19 Replies
- 2yChristian StylesBusiness MemberSpecialist · Cleveland, OH · Member since 2024 · 71 posts · 51 votes
This seems to be in the ballpark, but I would have a few follow up questions,
Is this their entire fee structure?
Typically tenant placement is the first month of rent so 100 bucks seems a little on the low side, what are they doing to advertise your property that they are able to do it for only 100 bucks?
I know we typically charge 5 percent of vendor maintenance and repairs but 10 may be the norm in your area. (I'm in Cleveland, OH)
I'm happy to look over your PM agreement if you want an extra set of eyes, always seem to find something of value in those!
Can you tell us a little about the property they would be managing too? That information is helpful when trying to asses fees.
Also, Congratulations on entering the wonderful world of REI! Happy to have you here!
- 2yThomas TalbertBusiness MemberProperty Manager · Austin, TX · Member since 2024 · 96 posts · 71 votes
Quote from @Christian Styles:
This seems to be in the ballpark, but I would have a few follow up questions,
Is this their entire fee structure?
Typically tenant placement is the first month of rent so 100 bucks seems a little on the low side, what are they doing to advertise your property that they are able to do it for only 100 bucks?
I know we typically charge 5 percent of vendor maintenance and repairs but 10 may be the norm in your area. (I'm in Cleveland, OH)
I'm happy to look over your PM agreement if you want an extra set of eyes, always seem to find something of value in those!
Can you tell us a little about the property they would be managing too? That information is helpful when trying to asses fees.
Also, Congratulations on entering the wonderful world of REI! Happy to have you here!
Agreed $100 does seem cheap for a placement fee but 10% is the market down in Austin. I would ask what all goes into their placement fee because they may do the bear minimum and the marketing for the property isn't that great of that $100 is true.
Prime Properties4.4244 Reviews - 2yAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
Normally, there are a bunch of hidden fees that you need to look out for when you read the contract. $100 is WAY too low and they will be losing money when finding a tenant.
Bartomeo Property Management4.7150 Reviews - 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Shannon Berry seems to be a bit light.
$100 Placement Fee? What SPECIFICALLY does the include? Are they going to put on MLS and what will they offer other agent that brings a tenant? What other websites will they place it on?
Lease Renewal Fee?
Eviction Fee?
Inspection Fee?
Logical Property Management4.9445 Reviews - Lender · Member since 2024 · 10 posts · 5 votes2y
Following along with what others have said, the $100 placement fee seems very low. When will they start charging the management fee? I would check to make sure they aren't charging a management fee until rent is collected. Also keep in mind that fees and charges matter, but a long term vacancy will hurt you more in the long run than a company who can better market the property even at a higher fee structure. Make sure you know all the fees going in, is there a steep onboarding fee? Will they charge for inspections, how soon do you have to give notice in the event you want to cancel and what would the buy out look like for the contract? When it comes to properly marketing, screening and maintaining a property the cheapest route isn't always going to be the best route, if you have any questions feel free to reach out!
- Rental Property Investor · Blacksburg, VA · Member since 2020 · 33 posts · 24 votes2y
Seems pretty in line with what we charge. If you ever need anything in VA let me know!!
- Member since 2024 · 4 posts · 5 votes2y
Quote from @Michael Smythe:
@Shannon Berry seems to be a bit light.
$100 Placement Fee? What SPECIFICALLY does the include? Are they going to put on MLS and what will they offer other agent that brings a tenant? What other websites will they place it on?
Lease Renewal Fee?
Eviction Fee?
Inspection Fee?
Thank you for your replies. For those of you who are property managers would I be able to get copy of your agreements so i can view different ones to learn what is average?
- Realtor · St. Petersburg, FL · Member since 2024 · 55 posts · 40 votes2y
Hey Shannon,
The Property Management fee of 9% is in line.
The $100 placement fee seems very low, I would ask what they are doing to market the property? Do they do self showings or will they stick a lockbox on the property and do virtual showings only? Professional pictures/videos? What sites will they post it to?
The maintenance markup is in line also.
I will be happy to read over your pm agreement if you would like!
Good Luck!
- 2yMichael McVetyBusiness MemberFort Myers, FL · Member since 2024 · 45 posts · 20 votes
Quote from @Shannon Berry:
I am wanting to enter the REI world but will not have time or skills to self manage. Looking for a property manager and think I have found one but wanted to make sure his fees are in line with the norm:
9% of all rent collected.
$100 placement fee when securing a new tenant.
10% markup on all vendor contracted maintenance and repairs
Does these numbers sound like they are in the ballpark for Midwest/Indiana?
Hi Shannon.
Property Management fees do change depending on the market and service levels a company provides. But that is in line.
As mentioned, the cost of finding a new renter for $100 makes zero economic sense. I worry when I see a company cost (property management or otherwise) that does not "make sense" for the service that is provided. In this case, they either have to make money elsewhere (hoping you have an old property that needs a lot of repairs) or they are going out of business. I have seen several management companies in this area try to be "cheap" and they fail. So please be careful.
The 10% maintenance cost is charged by a number of companies and is fine.
Do they not charge another fee for renewing a lease?
Red Fortress Property Management Co.4.2327 Reviews - 2yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Seems fine to me. I also agree the placement fee is a bit low. I'm not in the midwest, but I do not pay a full month's rent. I do pay a flat fee around $250 plus advertizing costs which to me is reasonable.
- 2yPeter StewartBusiness MemberReal Estate Broker · Indianapolis, IN · Member since 2018 · 160 posts · 168 votes
The 9% rate is under the norm for Indianapolis. Most PM's in the area charge 10%. Now, once you get a few under management with them, you might be able to negotiate that down a little. But at least for the first one, 10 is the norm.
I agree with the replies so far that the $100 placement fee is way too low. I typically see 1/2 to a full months rent.
Like with anything in real estate, you get what you pay for. Be wary of a PM that seems "cheap" with their pricing. A bad PM can cost you a lot of money in the long run, and a good one can save/make you more than you would have saved using the cheaper option.
Peter Stewart Realty4.968 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes2y
It doesn't matter if these fees are normal, high, or low. What matters is what value are they providing for the fees they charge. You need to know what a good PM looks like, then screen several until you find one that provides the appropriate value for what they charge.
Remember: cheaper doesn't mean you'll make more money.
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.
1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!
The DIY Landlord Book4.7248 Reviews - Real Estate Coach · Berwyn, PA · Member since 2008 · 10 posts · 1 vote2y
Quote from @Shannon Berry:
I am wanting to enter the REI world but will not have time or skills to self manage. Looking for a property manager and think I have found one but wanted to make sure his fees are in line with the norm:
9% of all rent collected.
$100 placement fee when securing a new tenant.
10% markup on all vendor contracted maintenance and repairs
Does these numbers sound like they are in the ballpark for Midwest/Indiana?
These amounts are reasonable but depends on what area - for example, in Philadelphia we charge 8% for full-service PM but charge 20% markup on maintenance and a full month for find a tenant - would call a reference or two before you jump in
- Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 29 votes1mo
That fee structure is in the ballpark for a lot of markets, but that 10% maintenance markup is the one I'd push back on. If they're already collecting a management fee, why are they also marking up your contractor bills? After 30 years in this business, I've never charged a markup on repairs — the management fee should cover the oversight, not become a second revenue stream every time your HVAC goes out. Ask them point blank: do you charge markups on maintenance? And get that answer in writing before you sign anything.
- Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 29 votes1mo
Those numbers are pretty typical for a lot of markets, but "typical" doesn't mean it's the best deal you can get. The part I'd push back on is the 10% maintenance markup — some companies charge that on top of already-inflated vendor bids, which means you could be paying 20-30% above market on repairs without realizing it. We don't mark up maintenance at all, and it took me a long time to understand how much that actually matters to an owner's returns over time. Before you sign, ask them to show you the last three invoices they passed through to another owner — that'll tell you fast whether their vendor pricing is competitive or not. Placement fee at $100 is low, which sometimes means minimal marketing and fast-fill-any-warm-body tenant selection... ask exactly what's included in that process.
- 1moAmit PatelBusiness MemberProperty Manager · Bartlett, IL · Member since 2025 · 141 posts · 57 votes
Those fees look pretty reasonable for the Midwest. A 9 percent management fee on rent collected sits right in the normal range of 8 to 10 percent for most residential properties. The $100 placement fee is actually on the low side, which is a plus for you, since many managers charge a larger flat fee or a portion of the first month’s rent when placing a new tenant.
A 10 percent markup on vendor maintenance is also common and fair. Some companies charge a bit more, and a few charge less or handle smaller jobs with in house staff, but 10 percent is standard and transparent.
Just be careful with any hidden fees. Ask for a full list of every possible charge, including things like lease renewal fees, inspection fees, eviction fees, or extra costs for after hours calls. Make sure everything is clearly spelled out in the management agreement so there are no surprises later.
Overall the structure is in line with what we see across Indiana and the broader Midwest. The most important piece beyond the numbers is how responsive they are, how they screen tenants, and how clear their reporting is. If those pieces feel solid, the fees themselves should not be a deal breaker.
Casanomy Property Management562 Reviews - 1moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Fees vary by area and state.
I would want a clear understanding of SPECIFICALLY what the PMC does to market vacant rentals.
- Many PMCs that charge low fees do NOT put a property on the MLS, so all real estate agents can see it to bring potential tenants - but the PMC does NOT tell the property owner this:(Here's some copy & paste advice:
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We’re a Property Management Company (PMC) in Metro Detroit ONLY, with 25+ years of experience, and we’ve seen owners make the same mistakes, over & over again when looking to hire a PMC – which drives us nuts!.
In our experience, the #1 mistake owners make is ASSUMING all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY.
So, owners mistakenly think price is the only differentiator – and look for a PMC like they’d shop for groceries☹
We encourage you to learn from the mistakes of others by reading posts here on BiggerPockets from owners that picked a PMC solely by price and regretted it.
We recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.
Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.
Even if someone gives you a referral, do NOT make the mistake of assuming that just because a PMC met their expectations, they’ll meet your expectations. We all have our own expectations and what works for someone else, may not work for you.
If you’re new to all of this, it's often a case of not doing enough research, as you don't know what you don't know!
So, ask more questions!
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊
Here’s some articles we’ve contributed to BiggerPockets about screening a PMC BETTER than you would a tenant!
20 Questions to Ask When Vetting a Property Management Company: Processes
13 Questions to Ask to a PMC: Communication and Documentation
24 Questions to Ask When Evaluating a Property Management Contract
Logical Property Management4.9450 Reviews - Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 29 votes1mo
The 9% monthly is reasonable... but that $100 placement fee is the one I'd push back on hard. Placing a quality tenant is the most important thing your PM does — it sets the tone for the entire lease. If they're only charging $100, ask what they're actually doing: where are they listing, how deep is the screening, are they verifying income and calling prior landlords? Quality screening typically costs more because it takes real time and systems. The 10% maintenance markup is also worth negotiating — some managers will drop it if you ask. Know what you're paying for before you sign.
- 1moKyle MccawBusiness MemberProperty Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
The 9% management fee is within the normal range in many markets, especially if it includes solid service.
The two things I'd look at more closely are the placement fee and the maintenance markup.
A $100 leasing fee seems unusually low. By the time a property is marketed, showings are coordinated, applicants are screened, the lease is prepared, and move-in is completed, there's a lot of work involved. I'd wonder how they're covering those costs without cutting corners somewhere else.
The 10% maintenance markup feels a bit outdated. Many professional managers today negotiate strong vendor pricing and either don't mark up repairs or charge a transparent coordination fee instead. I'd rather know I'm getting quality vendors, competitive pricing, and fast response times than worry about a hidden markup.
I'd focus less on the fee schedule and more on the total value. A property manager who minimizes vacancy, prices rents correctly, screens well, and protects your asset will usually make you far more money than the difference between an 8% and 10% management fee.
McCaw Property Management4.4900 Reviews
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