Property Management Fees: What to Expect and What You're Paying For

Owning a rental property can be a smart way to build wealth—offering passive income, long-term appreciation, and valuable tax advantages. But being a landlord isn’t always easy or hands-off. To truly reap the benefits, you need the right support in place.

That’s why many savvy landlords turn to professional property management. A good property manager can help reduce stress, improve tenant retention, and boost your return on investment by handling everything from rent collection to maintenance and leasing.

Of course, those services come at a cost—which raises a key question: how much does property management actually cost, and what are you getting for your money?

In this guide from Abilene Leasing & Property Management, we’ll break down the typical fees, pricing structures, and what to expect so you can make the most informed decision for your rental business.

What Fees Do Property Managers Charge?

When considering hiring a property manager, it’s important to understand the different types of fees you might encounter—and what each one covers.

Initial Setup Fee

This is usually the first fee that your property manager will require you to pay to get started. This is a one-time fee that helps cover expenses such as paperwork and processes required to set up your account with a dedicated property manager.

Generally speaking, expect to pay between $300 and $500 towards your account’s setup costs. That said, not all property management companies charge an initial setup fee, so make sure the property manager is clear on this.

Property Management Fee

This is a simple fee that property managers charge for the services they provide. It’s a flat percentage of the monthly rent. Usually, expect this to fall between 7- and 10 percent. For example, if the monthly rent is, say, $3,000, then expect to pay a property management fee of between $210 and $300.

For this amount, the following are some of the services you can expect to get from your property manager.

• Collecting rent when it becomes due at the end of the month.
• Making needed repairs and maintenance to the unit. Handling emergencies at the property.
• Handling the property’s accounting.
• Helping keep accurate records for such purposes as tax filing.
• Handling communication with tenants.
• Coordinating utilities per the lease agreement.
• Drafting and enforcing the lease agreement.

Generally speaking, most property management companies will have all their services listed on a dedicated service page. Just make sure they offer the services you’re looking for.

Ideally, if you’re just getting started as a landlord, go for a property manager that offers full-service property management services. This will ensure that you get everything off your hands when it comes to the day-to-day operations.

Tenant Placement Fee

This is another common fee that property managers charge rental property owners. This fee goes towards covering the re-renting process when looking to fill the vacant unit with a quality tenant.

The process includes:

• Property Preparation: The property manager will do a walkthrough of the property to check whether it is rent-ready. State and local landlord-tenant laws require landlords to provide tenants with a property that meets the basic safety, health, and building codes.

The property manager will advise you on the areas that need improving or repairing before a tenant can occupy the home.

• Property Marketing & Advertising: After handling the basic issues, the next step would be to market the property. The property manager will draft a rental ad, take high-quality photos, and distribute the ad on quality rental listing sites like Zillow, Trulia, and Craigslist.

A good property manager will also help you determine the best rental rate to charge tenants for an optimal return on investment (ROI).

• Tenant Selection: After a successful listing process, applicants will start coming in. The goal should be to have a good tenant selection process that helps you find a high-quality tenant.

A quality tenant pays rent on time, abides by the lease terms, reports issues on time, and renews their lease agreement multiple times. This is the type of tenant you should expect to get from a good property manager.

• Lease Signing: After the selection process is over, your property manager will help draft a lease and have a qualified tenant sign it. They will also help with enforcing its terms.

Other Property Management Fees

There are other miscellaneous fees that also go into a property management cost.

They include the following.

• Lease Renewal Fees: This is the cost that goes towards lease renewal. This is usually within the range of $150 and $300 for every new lease renewal done by the property manager.
• Maintenance Fees: Some property managers also charge property owners for any maintenance work they have coordinated. This is usually around 10% of the property maintenance job.
• Annual Inspection Fees: Rental inspections are key in ensuring a property remains in tiptop condition. A property manager will help handle them and coordinate them with the tenant.
• Eviction Fees: Although rare, a time may come when you may have to evict a tenant for lease noncompliance. Property managers often charge for this.

Bottom Line

There you have it—those are the most common fees that make up the overall cost of hiring a property manager.

While pricing can vary based on factors like your property's location, size, and the number of units you need managed, a typical rental owner can expect to spend around $2,000 per year on property management services.

It’s an investment that often pays for itself through reduced vacancy, better tenants, and fewer day-to-day headaches. If you own a rental property in Abilene and want to protect your investment while maximizing your returns, Abilene Leasing & Property Management is here to help.

As a full-service property management company, we take care of everything from tenant screening and rent collection to maintenance and financial reporting—so you don’t have to.

Contact us today to learn how we can make owning a rental property easier and more profitable.