Property Manager Fees and Contracts: What to Check
By LandlordShark Editorial Team · Published · Last reviewed November 1, 2026
General information, not legal advice
Landlord-tenant rules differ by state and city. Check your local statutes or talk to a licensed attorney before acting. Full disclaimer.Choosing to hire a manager is one decision. Choosing which manager, at what price, and on what terms is another. Fees vary widely by market, property type, and company, and the cheapest monthly rate is not always the cheapest overall. This guide covers common fee structures and the contract terms to read closely. If you are still deciding whether to hire help at all, start with self-manage or hire a property manager.
Common fee structures
Managers rarely charge a single price. Expect a mix of fees, and ask for all of them in writing. The structures below are general patterns, not quotes. Your market may differ.
| Fee | How it is usually charged | What to ask |
|---|---|---|
| Monthly management | A percentage of rent collected, sometimes a flat monthly amount | Is it on rent collected or rent due? Is there a minimum? |
| Leasing or placement | A portion of one month’s rent, or a flat fee | What does it cover: marketing, showings, screening, lease signing? |
| Lease renewal | A flat fee or smaller percentage | Is it charged even if the tenant simply rolls over? |
| Maintenance | Sometimes a markup on vendor invoices, or a coordination fee | Is the markup disclosed on invoices? Can I use my own vendors? |
| Setup or onboarding | A one-time fee | What does it include? |
| Eviction or legal | Extra fees, plus court and attorney costs | Who chooses the attorney? |
| Inspections | Per-visit fees | How often, and what is reported? |
| Vacancy | Some managers charge a reduced fee or none when vacant | Is there a fee while the unit is empty? |
Percentages and flat fees differ from company to company, so compare several proposals line by line rather than comparing only the headline rate.
A worked example
Round numbers for illustration only. Your actual fees will depend on the agreement.
Suppose a unit rents for $2,000 a month and the manager proposes a monthly fee of 10% of rent collected, plus a leasing fee equal to half of one month’s rent, plus a 10% markup on repairs.
| Item | Annual cost |
|---|---|
| Monthly fee (10% of $24,000) | $2,400 |
| Leasing fee (one new lease at half a month’s rent) | $1,000 |
| Markup on $3,000 of repairs (10%) | $300 |
| Total | $3,700 |
That is about 15% of annual rent, not 10%. (This assumes rent is collected all 12 months; a vacant month during turnover would lower the monthly fee but also your rent.) A competitor with a higher monthly rate but no markup and no leasing fee on renewals could come out ahead. Run the numbers for a year with turnover and a year without.
Contract terms to check
Read the whole agreement. The terms below often cause disputes later.
Term and termination. How long is the initial term? Can you cancel with notice, and how much? Look for early termination fees, and for clauses that charge you leasing fees on tenants the manager placed if you end the contract.
Who holds the security deposit. Deposit handling is regulated by state law, and some states have specific rules about where deposits are held and who is responsible. Ask whether the deposit sits in the manager’s trust account or with you, and how it will be accounted for. See security deposit rules for landlords.
Spending authority. Find the dollar amount the manager can spend without calling you. Set a limit you are comfortable with and require approval above it, except for true emergencies. Our guide to handling tenant maintenance requests can help you decide what counts as urgent.
Records and accounting. How often will you get statements, and in what format? Who owns tenant files and the lease records if you leave? Can you see invoices?
Licensing and insurance. Ask the manager to confirm licensing where required in your state, and check with your state licensing agency. Ask what insurance the manager carries and whether you should be listed as an additional insured. See landlord insurance explained.
Fair housing and screening. The manager acts on your behalf, so their practices affect you. Ask how they screen and apply criteria consistently. See fair housing for landlords.
Who decides. Confirm who sets rent, approves tenants, and chooses to start an eviction. You should decide, or at least approve, the big items.
Look for fees buried in the fine print
Watch for charges for things like late-fee splits, advertising, inspections, lease preparation, or payment processing. Ask for a complete fee schedule and request that the agreement list every charge. Have a local attorney review the contract if you can.Tax treatment
Management fees are generally a deductible rental expense; IRS Publication 527 lists management fees and commissions among the most common rental expenses. Your manager’s year-end statement should help you fill in Schedule E. See landlord tax deductions and the Schedule E guide. If you pay other contractors yourself, ask about reporting duties in our 1099 requirements guide.
Questions for references
Call current owner clients and ask: How often do you hear from the manager? How quickly are repairs handled? Have fees ever surprised you? How was the last turnover handled?
Next steps
Request written proposals from at least two or three managers. Put their fees into the same table, add up a year with one turnover, and compare. Mark any clause about termination, deposits, or spending limits that you want changed, and ask for revisions before signing. Then keep a copy of the signed agreement with your other rental records, and review the manager’s statements monthly, especially in the first few months.