There are two types of property management fees that can be charged, which include a fixed fee structure and a percentage of the monthly rent you collect.
Fixed Fee
The fixed fee structure is a flat monthly fee that you would be tasked with paying on a monthly basis. Some management companies will offer this structure instead of collecting fees based on a percentage of the month's rent. In most cases, the fixed fee is based on square footage, property type, and provided services.
If a property management company is managing a single-family home, flat fees can amount to $100-$120 per month on average. Even though the flat fee structure might seem like the better option, management companies aren't always motivated to improve a property's rental income if they aren't set to receive a portion of it.
Percentage of Rent
The majority of property management companies will charge a standard monthly fee that amounts to 8-12% of the total monthly rent that's collected. If a single-family home is being managed with rent of $1,200 per month, a 10% fee means that you would pay $120 per month. Whenever a property is vacant, it's common for management companies to charge a fixed fee.
There are a range of additional fees that could add to the costs you pay to property managers. These fees include:
The property management fees you pay depend on the total amount of work that the property management company performs when maintaining your rental property. For instance, fees will almost certainly be higher if the property management company is managing a multifamily building with several units as opposed to a single-family rental home.
The various factors that can alter property management fees that you'll be tasked with paying include:
Now that you have a better idea of how much property managers charge, you should be able to create an accurate price estimate for your rental property.
Sources: https://www.allpropertymanagement.com/resources/ask-a-pro/posts/how-much-property-managers-charge/
https://learn.roofstock.com/blog/how-much-do-property-managers-charge
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