How Much do Property Managers Charge?: Numbers for Every Major City and State

Introduction to Property Management Costs

Real estate investing is much more than just purchasing a property. For the savvy investor, understanding the full scope of expenses associated with owning rental properties is crucial. One of these key costs is property management fees. If you’re considering handing over the day-to-day operations of your rental property to a professional, this guide will shed light on what you might expect to pay across different regions in the U.S.

How Much Do Property Managers Charge?

Property managers typically charge a percentage of the monthly rent as their fee, although there are also other fee structures like flat fees. On average, these charges range from 5% to 12% of the monthly rent, but the actual rate can vary based on location, the services provided, and the number of properties under management.

Scroll to the end of the post to see a full list of average property management costs for every state and major city in the United States.

National Average Monthly Cost
Nationally, around $250 per month is the nor per property, though some property managers give discounts for multiple properties managed. Also, multi-family properties are usually charged a higher rate than a single family residence².

Factors Influencing Property Management Fees

1. Location of Property: Urban areas with higher living costs might have higher fees.
2. Number of Units Managed: Owning multiple properties might earn you a discount.
3. Services Included: Comprehensive services like maintenance, tenant screening, and legal assistance can increase costs.

Why Understanding These Costs Matters

When you’re in the realm of real estate investment, being well-versed with the ongoing costs is paramount. Here’s why:

1. Budgeting and Forecasting: Accurate budgeting can significantly influence your ROI.
2. Property Selection: If two properties have similar expected returns, but one is in an area with higher management fees, the choice becomes clearer.
3. Negotiating Power: Knowing average fees can give you an edge when negotiating with property managers.

FAQs

• How are property management fees calculated?
  • Typically as a percentage of the monthly rent, but flat fees are also common. Make sure you ask the property management company how they calculate their fees in various situations.
• Can I negotiate property management fees?
  • Yes, especially if you have multiple properties or if the market competition is high. It doesn’t hurt to try to make a deal to save yourself some money.
• Are higher fees indicative of better services?
  • Not necessarily. It’s essential to evaluate the services offered and check reviews or references.
• Do I need a property manager if I own just one rental property?
  • It depends on your comfort level in managing tenants, maintenance, and other responsibilities. Some investors prefer to start with a manager even for a single property. The farther you live from your rental property, the more helpful and logical it becomes to have someone else manage it for you. Your time and cost in traveling to the property should be factored in when making your decision.
• Can property management fees be deducted in tax filings?
  • Typically, these fees can be deducted as a rental business expense, but always consult with a tax professional.
• How can I ensure I’m not overpaying for rental property management?
  • Regularly review your fees in comparison to the average in your area and discuss any discrepancies with your property manager. We also highly recommend talking to other rental property owners in the area to ask them about what they pay and their experience.

Average Monthly Property Management Cost by State

Monthly Property Management Cost for the Top 100 U.S. Cities (Alphabetical Order)