The Short Answer
A property manager typically costs 8–12% of monthly collected rent for residential properties, plus additional fees for leasing, maintenance, inspections, and other services. For a Sacramento landlord with a $1,800/month rental, that’s $144–$216 per month in management fees alone — before the extra charges.
But that headline number is misleading. The real cost is significantly higher once you account for all the fees in a standard property management agreement. Let’s break it down.
Monthly Management Fee
This is the fee most landlords focus on — and it varies by location, portfolio size, and PM company.
| Market | Typical Monthly Fee | Notes |
|---|---|---|
| Sacramento | 8–10% | Competitive market, many PM options |
| San Francisco / Bay Area | 6–8% | Higher rents mean lower % needed for PM profitability |
| Los Angeles | 8–10% | Varies widely by neighborhood |
| San Diego | 8–10% | Similar to Sacramento |
| Inland Empire / Central Valley | 10–12% | Lower rents require higher % for PM viability |
| National average | 8–12% | Rural areas tend toward higher percentages |
What it covers: Rent collection, tenant communication, coordinating maintenance (not paying for it), monthly financial statements, and general oversight.
What it doesn’t cover: Pretty much everything else. The management fee is the base — the fees below are where PMs really make their money.
Leasing and Placement Fee
Every time a unit turns over, you pay a leasing fee for the PM to find and place a new tenant. This is one of the most expensive PM fees and one of the least discussed.
| Fee Structure | Typical Amount | Cost on $1,800/mo Rent |
|---|---|---|
| 50% of first month’s rent | Most common | $900 |
| 75% of first month’s rent | Common in competitive markets | $1,350 |
| 100% of first month’s rent (full month) | Premium PMs | $1,800 |
| Flat fee | $500–$1,000 | Less common but predictable |
The hidden incentive problem: Your PM earns this fee every time a unit turns over. That creates a subtle misalignment — they profit from turnover, while you lose money from vacancy, cleaning, and make-ready costs. A self-managing landlord who focuses on tenant retention avoids this entirely.
Lease Renewal Fee
Some PMs charge a fee when an existing tenant renews their lease. Yes, you pay for the privilege of keeping a tenant who’s already there.
- Typical range: $150–$300 per renewal
- What it involves: Preparing a new lease, getting it signed, updating records
- What it should involve: This is a 15-minute administrative task. A lease management tool handles it automatically.
Maintenance Markup
This is the fee that costs landlords the most over time — and the one they’re least aware of.
When your PM coordinates a repair, they typically add a markup to the vendor’s invoice:
- Typical markup: 10–20% of the vendor invoice
- How it works: A plumber charges $300. Your PM adds 15% ($45). You pay $345.
- Annual impact: If you spend $500/month on maintenance across your portfolio, the markup costs you $600–$1,200/year.
Some PMs also use preferred vendors who charge higher rates in exchange for guaranteed work volume. This is legal but means you’re paying above-market rates for routine repairs.
When you self-manage, you negotiate vendor rates directly. Many landlords find that building relationships with 2–3 reliable vendors in each trade (plumbing, electrical, HVAC, general handyman) results in better work at lower prices than what their PM was arranging.
Other Fees to Watch For
| Fee | Range | How Often |
|---|---|---|
| Property inspection | $75–$200 per inspection | 1–2x per year per property |
| Vacancy fee | $50–$100/month | During vacancies (some PMs only) |
| Advertising/marketing | $100–$500 per listing | Each turnover |
| Eviction coordination | $200–$500+ | Per eviction (not including legal fees) |
| Setup/onboarding | $100–$500 per property | One-time |
| Early termination | $500–remaining contract | If you leave before contract ends |
| Bill payment fee | $2–$10 per bill | For paying utilities, HOA, insurance on your behalf |
Total Annual Cost: A Realistic Example
For a Sacramento landlord with 8 rental units averaging $1,800/month rent:
| Fee | Calculation | Annual Cost |
|---|---|---|
| Monthly management (10%) | $14,400/mo × 10% × 12 | $17,280 |
| 2 tenant placements | $1,800 × 50% × 2 | $1,800 |
| 6 lease renewals | $200 × 6 | $1,200 |
| Maintenance markup (15%) | $800/mo × 15% × 12 | $1,440 |
| Property inspections | $150 × 8 units × 2/year | $2,400 |
| Advertising (2 turnovers) | $300 × 2 | $600 |
| Total PM cost | $24,720 |
Self-managing cost: Property management software at $79/month = $948/year.
Annual savings: $23,772
Put differently: your property manager costs you almost $2,000 per month — which is more than one of your units produces in rent. You’re effectively giving away an entire unit’s income to pay for management.
Questions to Ask Before Hiring a PM
If you’re evaluating property managers, ask these questions to understand your true cost:
- What is the monthly management fee, and is it based on collected rent or scheduled rent? (Collected is better for you.)
- What is the leasing/placement fee? Is there a tenant retention guarantee?
- Do you charge a lease renewal fee?
- Do you mark up maintenance vendor invoices? By how much?
- Do you charge during vacancies?
- What is the early termination clause?
- How often do you inspect properties, and what does it cost?
- Can I see a sample owner statement so I understand what I’ll be charged?
The Alternative: Self-Managing with Software
The work a property manager does — collecting rent, coordinating maintenance, managing leases, tracking compliance, communicating with tenants — is coordination work. And coordination is exactly what software is good at.
With property management software, you handle the same tasks your PM does, but you keep $20,000+ per year in your pocket. The tradeoff is 4–6 hours of your time per month — time that’s worth hundreds of dollars per hour at those savings.
For landlords with 2–75 units, the math is clear. The question isn’t whether you can afford to self-manage — it’s whether you can afford not to.