When you're considering investing in rental properties, hiring a property management company can help streamline your operations and ensure a consistent income. In 2025, property owners are looking for ways to maximize their return on investment while minimizing the hassle of property management. But how much do property management services actually cost, and what should you expect when hiring a property manager?
Property Management Cost Explained
The property management fee is one of the most important factors to consider when hiring a property management company. This fee is typically a percentage of the monthly rent collected from your property. On average, most property management companies charge a management fee of 8% to 12% of the monthly rental income. For instance, if your property generates $1,500 per month in rent, you could expect to pay between $120 and $180 monthly for management services. At Penny Realty, we charge a property management fee of 8% for a Single-Family Home or Condo. We offer discounts for multiple units.
Aside from the base property management fees, there are often other costs involved. These can include additional property management costs for services such as tenant placement, leasing, lease renewals and inspections. A tenant placement fee might be added, which typically ranges between 50% and 100% of the first month's rent, depending on the property management company.
Property Management Fees in 2025
A survey revealed that 63% of third-party property management companies plan to raise rents or resident-paid fees in 2025 to cover increasing expenses such as labor, property insurance, and materials.
For example, if a landlord manages a property with a monthly rent of $1,500, a 5% increase in rent to cover these rising costs would mean tenants pay an additional $75 per month. While these adjustments help landlords maintain profitability, they must balance this with renters' financial capacity to avoid turnover or vacancies.
These scenarios highlight the importance of strategic pricing and professional guidance, which a skilled property management company can provide to ensure both owner and tenant satisfaction.
Other Fees to Consider
In addition to the standard fees, some property management companies charge for specific services, such as:
Lease renewal fees: When tenants renew their lease, some property management companies charge a renewal fee, typically between $200 and $300.
Vacancy fees: If your rental property is vacant, some companies charge a vacancy fee to cover their marketing and advertising efforts to find new tenants.
Maintenance and repair fees: These can vary, but property managers may mark up the cost of maintenance and repairs or charge a flat rate for certain services.
Factors Influencing Property Management Fees
The property management costs you encounter will depend on several factors. One key factor is the location of your rental property. Properties in high-demand areas often have higher management fees, but they also offer higher rental income, which can offset the cost.
Another factor that can influence property management costs is the level of service you require. For example, if you only need help with tenant placement, you might pay a tenant placement fee instead of a full-service property management contract. Full-service contracts include everything from marketing your rental property, screening tenants, to handling repairs and collecting rent.
Some property management companies charge a flat rate for all services, while others charge based on the complexity and size of the rental property. It's essential to ask for a clear breakdown of all fees before signing a property management contract to ensure you understand the full scope of the charges.
Benefits of Hiring a Property Manager
While the property management fee may seem high, the benefits of hiring a property manager often outweigh the costs. Property managers are experts at finding tenants, handling maintenance requests, and ensuring that tenants adhere to the lease agreement. They also help you navigate legal requirements such as federal fair housing laws, which can be complicated for you to manage on your own.
By hiring a property manager, you free up your time, reduce stress, and minimize costly mistakes, all while increasing the likelihood of attracting reliable tenants who will take care of your rental properties.
If you're considering hiring a Property Manager in San Diego County, contact Penny Realty today. We offer comprehensive property management services tailored to meet your needs and help you maximize your investment. Penny Realty Property Management offers a 90 day money back guarantee, plus $500!
