Free Rental Property Management Fee Calculator

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.

Monthly Property Management Fees = (Gross Rent Per Month For All Units¹ x Percentage % Management Fee²)

Average Rental Property Management Fee Cost (%)

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:

Property Management Fee Calculation Example

Suppose you own a fourplex where each unit rents for $1,500 per month, giving you $6,000 in gross monthly rent. A local property management company charges the national average property management fee of 9% of gross rents. Your monthly property management cost would be:

$6,000 Gross Monthly Rent × 9% Management Fee = $540 Per Month

Over a full year at full occupancy, that equals $6,480 in annual property management fees.

Now consider how the fee structure changes the math. If one unit sits vacant and another tenant stops paying, a company billing on “rent collected” would charge 9% of the $3,000 actually received – just $270. A company billing on “rent due” would still charge the full $540 even though half the rent never arrived, which is a critical distinction to confirm before signing a property management agreement.

Finally, compare a flat fee alternative: at roughly $125 per unit per month, the same fourplex would cost $500 monthly regardless of occupancy or rent levels. Running your own numbers through the property management fee calculator above lets you compare percentage-based, flat fee, and cost-plus pricing structures side by side, so you know exactly what professional rental property management would cost before hiring a property manager.

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Property Management Resources

What are Property Management Fees?

A property management fee is a recurring cost payable to a property management company for providing day-to-day management services of a rental property.

More Rental Real Estate Terms →

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.

How to Determine the ROI of Property Management Costs?

What are the 3 Ways to Calculate Property Management Costs?

Property management companies usually structure their fees in one of three main ways: Fixed Fee, Percentage Based, or Cost Plus. We take a look at each type below:

1. Fixed Fee

Fixed fee (also called flat fee) is a common fee structure found in property management where the management fee is a fixed dollar amount, usually paid on a monthly basis. The amount is typically based on property type, square footage, and property management services provided. For example, the national average flat rate fee to manage a single-family home is approximately $125 per month, however, these rates can vary depending on your local market and property type. While it is nice for landlords to have a fixed budget for property management expenses, the drawback to this type of pricing is that the fee is usually required to be paid regardless of the property’s vacancy status.

2. Percentage Based

Percentage based is a common fee structure found in property management where the fee is based on a percentage of the rent. This is the most common type of fee structure in property management. The average fee is 4% – 15% of monthly rent. This large variance in this range is due to the economies of scale pricing model (i.e. pricing is discounted proportionately for the larger the property and more units you have under contract with them). The rate to manage 1 unit might be on the higher end around 12%, whereas the  rate to manage hundreds of units could be on the lower end around 4%. It is important to note that this type of fee structure can be calculated off of “rent due” or “rent collected”. Each way can have drastically different outcomes on the total amount of fees property manager will have to pay, as we take a look at each below:

3. Cost Plus

Cost plus (also called hybrid) is a property management fee structure that combines both the flat fee and percentage of rent collected pricing structures. An example of this pricing structure would be a flat $100 monthly management fee, plus 4% of monthly rents. This type or pricing is preferable to landlords who prefer a balance in pricing, while seeking to get the highest rent as possible. In cost plus pricing structures, it is common for additional services to be billed separately. These additional services can include charges such as a setup fee, cancellation fee, extra maintenance fees, renewals fees, etc.

Fixed Rate vs Percentage vs Cost Plus

Now that we’ve taken an in depth look at each type of property management pricing structure, let’s compare all 3 main types in an easy to understand chart below.

Residential vs Commercial Management Fees

Different types of rental properties require different responsibilities that need to be compensated accordingly. Residential property management is usually more labor intensive but is also prone to greater competition. Commercial property management might be less labor intensive, but requires specialized knowledge of the commercial properties and comes with higher stakes since commercial tenants are savvy business owners.

Can Property Management Fees be Negotiated?

Yes, property management fees can sometimes be negotiated. However, this depends on the management company and the services they provide. Some companies may be willing to negotiate their fees, especially if you have multiple properties for them to manage. It’s always worth having a discussion about fees and services to ensure you’re getting the best value for your money.

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