Property management fees are the monthly fee paid by property owners to property management companies for providing professional management services. Although some charge a flat fee, most charge a percentage of the property’s gross monthly rent. Our property management cost calculator is a convenient rental property calculator for property owners to easily understand and calculate how much in fees they would be paying to have their rental property professionally managed.
Calculate Property Management Fees
Please input the required fields (*) below to calculate a property’s property management fees. Be sure to also check out our guide on how property management works.
This calculator is meant for educational purposes only. The calculation generated from the calculator does not, and is not intended to, constitute financial advice. As such, all information, content, and materials available on this site are for general informational purposes only. Please review our Editorial Standards for more info.
Property Management Fee Formula
The standard formula for calculating property management fees rate is noted below. Note that you will first need to determine your gross rent per month for the entire property and the property management percentage (%) values first to input into calculation.
1. Gross Rent – Gross rent is the full amount of rent paid before other expenses are subtracted, such as utility or maintenance costs.
2. Management Fee % – The percentage of gross rents that a property management company charges rental property owners for management services.
20 Other Types of Potential Property Management Costs
In addition to the monthly service fees that a property management company may charge, there are many other one-time or ad-hoc fees that they may also charge in addition to their regular service fees. Below is a sample of the most common additional costs:
|Utility Setup Fee
|Background Check fee
|Early Termination Fee
|Bill Pay Fee
|Reserve Fund Fee
|On-Call Service Fee
|Project Management Fee
|Key Holding Fee
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Property Management Fee Resources
Property Management Fee Calculator FAQ
Do Property Managers Charge Fees When the Property is Vacant?
This varies by property manager and agreement. Some managers might charge a reduced fee, a flat fee, or no fee at all during vacancy periods, while others might still charge the standard percentage based on potential or market rent.
What are Other Ways to Calculate Property Management Costs?
Beyond the typical method of charging a monthly percentage of rent, property management costs can also be calculated using alternative approaches. One such method is a flat fee structure, where the property manager charges a fixed amount per month regardless of the rental income. Another approach involves performance-based fees, where costs are linked to specific metrics like maintaining high occupancy rates or achieving rent increases. Additionally, some managers may opt for a hybrid model, combining elements of percentage-based and flat fee structures, potentially including additional fees for services like tenant placement or major maintenance projects.
Can Property Management Fees be Adjusted Based on Performance or Benchmarks?
Yes, some property owners negotiate performance-based incentives or adjustments in the management fees. For instance, a lower fee might be agreed upon if the property remains vacant beyond a certain period, or there might be bonuses for achieving above-market rents or high tenant retention rates.