Property Management Costs

Member since 2025 · 14 posts · 18 votes

Hi all,

I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.

5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.

2 Reply

328 views

Most Popular Reply

Richard F.

Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes

5mo

There really are no "Standard" fees OR contracts for Property Management or Rental Agreements, among others. You can search for "sample residential property management contract" and find a lot of formats, with varying detail, and varying "fill in the blank" sections for customizing to an individual transaction. In other words, ANY contract is "negotiable". Some PM's are less flexible than others, but the fact is they all need to profit. They, in theory, look at the man hours involved for each aspect of PM, and the condition of the property, and the apparent quality of any Tenants. Usually there is a percentage of gross income as a baseline, then there may be "ala carte" items, or areas where you can require certain constraints. All of which, is negotiable. BUT, it takes time to review the actual contract, discuss with the PM their actual processes, strategies, and guidelines to see if they mesh with your needs/wants.

You should have a list of questions to ask regarding various processes and charges, how late fees are handled and WHO GETS the late fee, among many other points. @Drew Sygit has posted numerous times with a decent list of questions you should consider, as have I under similar topics.

3 Reply

See this reply in the discussion

11 Replies

Jump to latestLatest

Sort by

Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
5mo
There really are no "Standard" fees OR contracts for Property Management or Rental Agreements, among others. You can search for "sample residential property management contract" and find a lot of formats, with varying detail, and varying "fill in the blank" sections for customizing to an individual transaction. In other words, ANY contract is "negotiable". Some PM's are less flexible than others, but the fact is they all need to profit. They, in theory, look at the man hours involved for each aspect of PM, and the condition of the property, and the apparent quality of any Tenants. Usually there is a percentage of gross income as a baseline, then there may be "ala carte" items, or areas where you can require certain constraints. All of which, is negotiable. BUT, it takes time to review the actual contract, discuss with the PM their actual processes, strategies, and guidelines to see if they mesh with your needs/wants.
You should have a list of questions to ask regarding various processes and charges, how late fees are handled and WHO GETS the late fee, among many other points. @Drew Sygit has posted numerous times with a decent list of questions you should consider, as have I under similar topics.
3 Reply
Patrick O'SullivanBusiness Member
Property Manager · Phoenix, AZ · Member since 2024 · 563 posts · 214 votes
5mo
Fee structures absolutely vary by company and market, and many items are negotiable depending on portfolio size and unit count. The key is understanding the full fee schedule upfront and measuring it against NOI performance over time.

The bigger picture is usually the total yearly management cost versus performance. If the PM keeps vacancy low and tenants solid, the extra fees can still make sense financially.

[email protected]480-795-7938
get MULTIfamily Property Management4.7215 Reviews
Website View Page
0 Reply
Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
5mo
Quote from @Chris Mooney:

Hi all,
I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.

5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.

Happy to share my PM referrals!
[email protected]614-363-2787
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
Website View Page
0 Reply
Philip Wrigley
Property Manager · Chicago, IL · Member since 2026 · 45 posts · 35 votes
5mo
Quote from @Chris Mooney:

Hi all,
I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.

5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.

Hey Chris, we manage properties primarily in Midwestern markets and have a rates starting at 15% commission. There are companies out there that will charge 40% but will try to convince you it is worth it because they supply the paper products.
0 Reply
Jim Johnson
Real Estate Agent · Memphis · Member since 2026 · 632 posts · 362 votes
5mo
What you’re describing is pretty common across a lot of PM structures, especially in lower-margin markets where management companies break operational tasks into separate billable items instead of building everything into the base fee.

A lot of owners focus on the management percentage upfront, but the real economics usually show up in the ancillary fees:
• Inspection/visit fees
• Lease renewal fees
• Vacancy coordination fees
• Lockbox/setup charges
• Maintenance coordination markups
• Notice posting/admin charges

Individually they don’t look huge, but operationally they can absolutely compress margins over time, especially across multiple properties.

I don’t necessarily think the existence of the fees is the biggest issue — it’s whether the overall operating model still produces good outcomes and predictable performance after all-in costs are considered.

Honestly, one of the hardest parts of managing remotely is learning how to underwrite the PM relationship itself, not just the property. Two companies can advertise similar management rates but operate very differently once all the operational charges and maintenance handling start flowing through.

The fact that you’re digging deeper into metrics and operational profitability now is probably the right shift. A lot of long-term performance in rentals comes from controlling operational leakage, not just acquisition price or rent growth.
1 Reply
- Chris Mooney
  OP
  Member since 2025 · 14 posts · 18 votes
  5mo
  Quote from @Jim Johnson:
  
  What you’re describing is pretty common across a lot of PM structures, especially in lower-margin markets where management companies break operational tasks into separate billable items instead of building everything into the base fee.
  
  A lot of owners focus on the management percentage upfront, but the real economics usually show up in the ancillary fees:
  • Inspection/visit fees
  • Lease renewal fees
  • Vacancy coordination fees
  • Lockbox/setup charges
  • Maintenance coordination markups
  • Notice posting/admin charges
  
  Individually they don’t look huge, but operationally they can absolutely compress margins over time, especially across multiple properties.
  
  I don’t necessarily think the existence of the fees is the biggest issue — it’s whether the overall operating model still produces good outcomes and predictable performance after all-in costs are considered.
  
  Honestly, one of the hardest parts of managing remotely is learning how to underwrite the PM relationship itself, not just the property. Two companies can advertise similar management rates but operate very differently once all the operational charges and maintenance handling start flowing through.
  
  The fact that you’re digging deeper into metrics and operational profitability now is probably the right shift. A lot of long-term performance in rentals comes from controlling operational leakage, not just acquisition price or rent growth.
  
  Really great feedback here, I've certainly learned that lesson. The focus on upfront percentage has been weighted more in my decision making, but has not been nearly as impactful! The bullet list of random charges you mentioned are all culprits of margin compression in my business at the moment.
  
  What have you seen working for operators to reduce drag on NOI due to those ancillary fees?
  0 Reply
Alioune Camara
Realtor · OH · Member since 2026 · 122 posts · 77 votes
5mo
Quote from @Chris Mooney:

Hi all,
I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.

5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.

Chris, you aren't crazy—this is the standard industry shift toward "a la carte" fee structures, where property managers lower their baseline monthly percentage but make up their margins by charging separate line-item operational fees for everyday tasks. In competitive investor markets like Cleveland, charging extra for physical maintenance triage visits, administrative non-renewal notices, and lockbox placements has unfortunately become standard practice rather than being absorbed into the monthly management fee. To protect your margins and become a more profitable operator, you just have to manage the manager by auditing your ledger to ensure they aren't double-dipping on both a "visit fee" and a contractor markup, while pushing them to use digital tenant troubleshooting to eliminate unnecessary fieldwork charges.
I hope that helps!
1 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
5mo
Quote from @Chris Mooney:

Hi all,
I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.

5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.

Going to guess these PMCs are offering monthly management fees below "industry standard" 10%?
If so, they're just making up for their low teaser-rate, by charging more ancillary fees.
This is no different than the airlines charging every extra fee they can think of instead of raising ticket prices. Or the discount airlines offering cheap tickets, but then "gouging" on everything else.
The consumer is often their own worst enemy when it comes to "fair & transparent" pricing.
[email protected]248-209-6824
Logical Property Management4.9465 Reviews
Website View Page
1 Reply
- Chris Mooney
  OP
  Member since 2025 · 14 posts · 18 votes
  5mo
  Quote from @Drew Sygit:
  
  Quote from @Chris Mooney:
  
  Hi all,
  I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.
  
  5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.
  
  Going to guess these PMCs are offering monthly management fees below "industry standard" 10%?
  If so, they're just making up for their low teaser-rate, by charging more ancillary fees.
  This is no different than the airlines charging every extra fee they can think of instead of raising ticket prices. Or the discount airlines offering cheap tickets, but then "gouging" on everything else.
  The consumer is often their own worst enemy when it comes to "fair & transparent" pricing.
  
  The current PM I use charges a flat fee of $75 per SFH, which ends up being around 8% of monthly rent. But even when I had a larger PM in the area, they charged 10% and still added on all the ancillary fees. I'm all for a business making money, just feels excessive at times, especially when I'm really digging into numbers and trying to become a better operator.
  Thanks for taking the time to share your insights.
  0 Reply
- Drew SygitBusiness Member
  Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
  5mo
  Quote from @Chris Mooney:
  
  Quote from @Drew Sygit:
  
  Quote from @Chris Mooney:
  
  Hi all,
  I'm an out of state investor with a portfolio in Cleveland, OH. I'm on my third property manager, and wondering if the PM specific expenses I've seen in Cleveland are standard everywhere. Fees such as visual inspection fees or visit fees to look at a maintenance request that was raised, or giving 30 day notice to a tenant that we're not offering renewal, or installation of a lockbox on a vacant unit.
  
  5 years ago when I first started investing, it felt like I was being nickel and dime'd, but now I've seen this across multiple PMs, wondering if its just industry standard? The little charges here and there add up over time and eat away at margins, but I've decided to really dig deep into numbers and metrics and learn how to be a more profitable operator.
  
  Going to guess these PMCs are offering monthly management fees below "industry standard" 10%?
  If so, they're just making up for their low teaser-rate, by charging more ancillary fees.
  This is no different than the airlines charging every extra fee they can think of instead of raising ticket prices. Or the discount airlines offering cheap tickets, but then "gouging" on everything else.
  The consumer is often their own worst enemy when it comes to "fair & transparent" pricing.
  
  The current PM I use charges a flat fee of $75 per SFH, which ends up being around 8% of monthly rent. But even when I had a larger PM in the area, they charged 10% and still added on all the ancillary fees. I'm all for a business making money, just feels excessive at times, especially when I'm really digging into numbers and trying to become a better operator.
  Thanks for taking the time to share your insights.
  
  VERY common for flat-fee operators to add a BUNCH of additional fees! It's all really "bait & switch", but naive/cheap owners keep falling for it.
  I'm curious about what additional fees the companies charging 10% have?
  Some of these may be industry standard, like handling maintenance & evictions.
  Others may be for additional services that are NOT industry standard (or weren't 15+ years ago), like paying utility bills or property taxes.
  Our management contract has really grown since the Great Recession due to the number of newbie investors buying rentals with no real clue how to run them. So many asked us to provide additional services, that we added them to our standard management contract.
  [email protected]248-209-6824
  Logical Property Management4.9465 Reviews
  Website View Page
  0 Reply
Lisa Davis
Member since 2025 · 31 posts · 11 votes
5mo
Those fees are unfortunately pretty standard in Cleveland and most Midwest markets. Visual inspection fees, notice delivery charges, and lockbox installations have become normalized line items as PMs look to offset thin management percentages.

The way I've learned to evaluate it is total cost of management, not just the headline percentage. A PM charging 8% with a dozen ancillary fees often costs more than one charging 10% with fewer add-ons.

Ask for a full fee schedule before signing anything and model out what a typical year actually costs across maintenance visits, renewals, vacancies, and inspections. That number is what matters, not the rate on the agreement.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.