What Is a Real Estate Property Management Fee?

A good property manager is worth the expense.
A good property manager is worth the expense. (Image: Jupiterimages/Comstock/Getty Images)

A real estate property management fee, for services rendered by a property manager, is often a necessary expense for some property owners. It's conceivable that a landlord could pass the fee on to their tenants, directly or by way of higher rent if the market will allow. In most states, property managers must be a licensed real estate broker. Some property managers are also members of one or more of several national associations of property managers such as The Association of Residential Property Managers Association (NARPM) or The Institute of Real Estate Management (IREM).

Real Estate Property Managers

Property managers are responsible for maintaining and managing either commercial or residential properties. The responsibilities differ greatly between commercial and residential properties, but generally follow the same pattern, which includes advertising, screening and interviewing tenants, showing properties, preparing leases, collecting and depositing depositing monthly rents, preparing budgets, analyzing insurance coverage, making small repairs or supervising service technicians and handling emergency issues as they arise. Communication is a critical aspect of property management. Communicating with tenants and clients can help curtail problems before they arise.

Communication and Responsibilities

Professionalism is at the heart of every good property manager. A property manager should, at all times, act in the best interests of their client. Any contractual relationship between a property manager and a property owner should be in a written management agreement which details the property manager's responsibilities and fees. Property managers should regularly communicate with with their clients and provide written reports of all receipts and expenses.


Residential property managers commonly charge 10 percent of the initial deposit and 10 percent of each monthly rental payment in exchange for managing a property. Fees for commercial property managers can vary greatly, but are generally less if the same owner has multiple properties. Although property managers may present the image that their fees are standard, their fees and services are always negotiable. If costs are a major concern, you can always negotiate to reduce the services you would like the property manager to perform.

Alternatives to Fees

It is up to a property owner as to whether they use the services of a property manager. Long distance owners, owners with full-time careers, owners with too many properties or those who simply do not have the time or temperament to deal with tenants may find it worth the additional expense to hire help whether it is commercial or residential. An apartment building owner may consider on-site manager to handle maintenance, but understand the licensing issues in your state before asking them to handle other duties, like collecting rent.

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