You’ve got a rental property (or you’re thinking about getting one), and someone’s told you to hire a property manager. But then comes the sticker shock, those property management fees.
Are they worth it?
Well… it depends. And I know that’s not the tidy answer we all crave, but hang in there. Because the real cost of a property manager doesn’t cover only the percentages and invoices. You should also think in terms of time, stress, and surprise plumbing emergencies at 3 a.m.
Let’s take a closer look. Maybe you will recognize the signs that you need a property manager.
What Exactly Are You Paying For?
Most property management companies charge between 8% and 12% of the monthly rent. That’s the baseline. But it rarely stops there. You might also see setup fees, leasing fees, renewal fees, and (my personal favorite) “miscellaneous.”
Let’s say your rental goes for $2,000/month. At a 10% fee, that’s $200 a month. Toss in a leasing fee of, say, half a month’s rent once a year, and you’re looking at $2,400 to $2,800 a year just to have someone else handle things.
Sounds like a lot, right?
It is. Kind of. But then again… maybe not.
Time vs. Money (vs. Your Sanity)
If you’ve got one unit and it’s a dream tenant who pays on time and never calls, you’re probably wondering what all the fuss is about. But that’s the unicorn scenario.
What happens when your tenant ghosts you two months before their lease is up? Or when the AC dies during a heatwave and you’re on vacation in another time zone?
According to Chandler Property Management, that’s where property managers earn their keep. They field those late-night calls. They schedule the repairs. They chase rent. They handle move-outs, screen new tenants, and sometimes even go to court when things get messy.
Talk about managing the chaos, right?
So… Are They Worth It?
Here’s where it gets tricky a little bit. If you’re local, handy, and have time to babysit your investment, maybe you can pocket the fees and do it all yourself.
But if you’ve got a full-time job? A family? Or more than one property? Then a good property manager might actually save you money in the long run.
Here’s a stat that caught my eye: according to Buildium’s 2024 Industry Report, 78% of property owners say working with a management company improved their tenant retention. And guess what? Long-term tenants mean fewer vacancies, less turnover, and more stable income.
Also worth noting: The same report found that properties managed professionally had 15% fewer legal disputes. No small thing when even a basic eviction can cost thousands.
But Beware the Fine Print
If we talk about the property managers, we got to be real: some are amazing, responsive, transparent, and proactive. Others… well, let’s just say their voicemail game is strong.
So before signing anything, ask questions like:
- What exactly does the monthly fee include?
- Are maintenance costs marked up?
- How do they handle tenant screening?
- What’s the eviction process like (and who pays for it)?
Also, read the contract. Twice. And then once more for the fine print about “additional administrative costs.” That phrase alone has haunted many a landlord.
The Hidden Costs of DIY Management
It’s easy to look at a fee on paper and scoff. But have you factored in your own time? Your emotional energy? The money lost during a longer vacancy because you didn’t have time to list it quickly?
Or worse… picking the wrong tenant because they “seemed nice” and you didn’t run a full background check?
A property manager’s fee often pays for itself simply by avoiding bad decisions.
A Quick Reality Check
Here’s a little mental math exercise:
- Add up the hours you’d spend per month handling the property yourself.
- Multiply by your hourly rate (or what your time should be worth).
- Add in one surprise repair, a tenant issue, or a lease renewal.
Then ask yourself: Is that more or less than the manager’s fee?
If it’s more, well, you have your answer.
If it’s less… you might still choose a manager, because sometimes peace of mind is priceless. (Especially when the plumbing isn’t.)
The Bottom Line?
Property management fees aren’t cheap. But neither is stress, lost rent, or dealing with flaky tenants.
So are they worth it? Maybe. It depends on your situation, your bandwidth, and your tolerance for clogged drains and awkward tenant conversations.
But for many landlords, those fees are less of a cost and more of a buffer, a soft landing when the real estate rollercoaster gets bumpy.
At the very least, now you know what you’re getting into. And knowledge, as they say, is power.
(Just hopefully not power that shorts out mid-winter.)
