How to Account for Property Management Fees as a Property Manager

Property managers are responsible for the care and maintenance of many properties, including commercial buildings and apartment complexes. They receive compensation in the form of property management fees. If you are starting your own property management company, take the time to calculate a competitive yet lucrative management fee.

• Consider your duties. Know what types of services your management company will provide. You might consider offering basic maintenance, such as replacing locks and repairing lights, as well as lawn care services. Many property management firms offer tenant and rental services as well as advertising services. Your company need not offer all of these services, but it is imperative that you decide which services you would like to offer to your clients.


• Determine your fee schedule. You might decide to charge a flat rate fee and include everything from advertising to lawn care in that monthly fee. However, you might elect to charge a separate fee for each service that a client requests. How you set up your fee schedule is up to you as a business owner. In addition to monthly fees, consider whether or not you want to charge an initial sign-up fee to clients.


• Study the competition. In order to obtain clients, you need to set a fee that competes with the fees of other property management firms in your area. Begin by learning what the competition is charging and what services they are offering. Set a competitive fee. If you wish to charge a higher fee than the competitors, you must be prepared to offer additional services in exchange for the extra income.


• Choose your fee. Many times, property maintenance fees are determined based on a percentage of the monthly rent of a property. This percentage can range from 4 percent to as much as 12 percent.


• Remain competitive. Be prepared to adjust your fees accordingly in order to remain competitive in your field.