Property Management Cost Calculator
Estimate annual property management fees for a property using the calculator below.
Annual Property Management Fees:
Annual Rent Income
Percentage of Rent in Fees
Fee Breakdown
| Management Fee: | $ |
| Lease-Up Fee: | $ |
| Repairs Markup: | $ |
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How to Calculate Property Management Fees
Property management fees are the fees charged by companies for managing rental properties, such as advertising and marketing, screening and selecting tenants, handling maintenance and repairs, and collecting rent.
Property management companies will handle all of these things for a property owner so that the property owner rarely, if ever, needs to communicate with their tenants.
Calculating property management fees can be a bit tricky, as there are several factors that impact how they’re calculated. Most property management companies charge a management fee of 8-12% of the monthly rent.
In addition, some property management companies will also charge a fee to find and select a tenant for the property. This is known as a lease-up fee, and is often charged as a percentage of the first month’s rent.
Some property management companies may charge additional fees for repairs that are needed, usually as a percentage of the repair cost.
So, to calculate the property management fees, you need to calculate the different costs that the property management company you’re working with will charge.
Calculate the Management Fee
As we noted above, the management fee is usually 8-12% of the monthly rental income. So, to calculate the management fee, multiply the monthly rent by the percentage charged, then multiply that value by 12 to find the management fees for the year.
For example, let’s calculate the management fee for a property that rents for $1,600 per month and the property manager charges 10% of rent for their fee.
$1,600/mo × 10% = $160/mo
$160/mo × 12 = $1,920/yr
Calculate the Lease-Up Fee
If your property manager is locating a tenant for the property and they charge a lease-up fee as a percentage of the first month’s rent, then you can calculate the lease-up fee by multiplying the monthly rent by that percentage.
For example, if the property manager charges 50% for a lease-up and the rent is $1,600 per month, then the lease-up fee will be $800.
$1,600/mo × 50% = $800
Calculate the Repair Markup
You can calculate the markup for repairs using the same method as above. Estimate the amount of repairs per year for the unit, then multiply that by the markup percentage charged by the management company to find the repair markup per year.
Add Up the Fees
To calculate the total property management fees per year, add up all of the fees, including the management fee, lease-up fee, and repair markup. Be sure to add in any additional fees the manager may charge into the total.
The result is the total property management fees. You can use this to determine the net operating income and cap rate for the property.