The Real Cost of Property Management: Fees, Hidden Costs, and Alternatives


Property owners often contemplate whether hiring a property management company is the right decision. While doing so brings a host of benefits, it’s essential to understand the range of fees associated with their services. Furthermore, knowing about alternative solutions, such as hybrid property management, can guide property owners toward sustainable profitability and less stress in managing their rentals.

Things To Be Aware

  1. Deciphering Fee Structures: Property management fees can differ based on the property’s size, condition, and location. Generally, companies may charge a flat monthly rate or a percentage of the monthly rent.
  2. Beware of the Hidden Charges: It’s crucial to spot the less-obvious fees in your contract. Some of these might include set-up fees, marketing costs, maintenance charges, and fees related to vacancies, evictions, or contract terminations.
  3. Read the Fine Print: Scrutinize your contract thoroughly. Negotiate when possible and ensure you’re clear on all terms, especially regarding renewals and contract termination.
  4. Maintenance & Repairs: Maintenance can be a significant expense. Confirm if they are inclusive in the fee and understand any additional charges for services beyond the basic package.
  5. Explore Newer Options: Look for innovative property management alternatives that offer transparent pricing structures and more flexibility.

Diving Deeper into Fees:

  • Base Fees: The property’s size, condition, and location primarily determine this fee. It can be a flat rate, starting around $150 or a percentage, typically between 4% to 15% of the monthly rent.
  • Account Set-Up Fees: A one-time fee to cover the administrative tasks related to your property. While it’s pitched as a means to cover administrative overhead, it can also deter clients from switching services.
  • Placement Fees: This is for sourcing and placing a new tenant in your property. Depending on the agreement, it might be a flat fee or a percentage of the rent.
  • Marketing Expenses: While some placement fees might include marketing, often there’s an additional charge for advertising beyond basic listing, including photography and videography services.
  • Maintenance Charges: These can either be included in the main fee or charged additionally, especially if outsourced. Some companies may add mark-ups on third-party services, so it’s essential to understand these nuances.
  • Renewal Fees: A charge applied when a tenant renews their lease. It’s worth questioning the need for this fee, especially if it’s similar to the placement fee.
  • Eviction Fees: If eviction becomes necessary, be prepared for additional costs. This could cover everything from administrative tasks to court or attorney fees.
  • Vacancy Charges: These are applied if your property is unoccupied. It could be a one-time charge or a monthly fee.
  • Contract Termination Costs: Breaking a contract early often comes with penalties. Ensure you’re clear on the terms before entering into an agreement.


This isn’t an exhaustive list. Always read agreements closely and ask questions. If a company isn’t transparent about its fees, it’s a cue to dig deeper before committing. Proper research and understanding can save property owners from unexpected expenses and potential hassles.

An Cost-effective Alternative: Hybrid Property Management

PortfolioBay has introduced a unique hybrid property management approach, ensuring an optimal balance between landlord flexibility and cost-efficiency. This approach synergizes the efficiency of software automation with the convenience of on-demand onsite services to enhance the landlord experience.

How Does Hybrid Property Management Work?

  1. Self-Management: Utilize our software to handle payments, accounting, and lead management for tenant turnovers.
  2. On-Demand Outsourcing: If you’re unavailable, delegate any management tasks to us for a fee, typically ranging from $70 to $200.
  3. Away Mode: If you anticipate being unreachable for an extended duration, activate the “Away Mode” using a straightforward toggle. Our team will handle any maintenance issues that arise during your absence, with charges only applicable for actual maintenance work undertaken.

This innovative approach offers landlords a degree of freedom comparable to traditional property management services, but without the plethora of hidden and recurring fees. On average, landlords can anticipate savings of 60-80% on management costs in comparison to conventional methods. PortfolioBay’s hybrid property management service has already facilitated significant savings for landlords in areas including Milwaukee, Brookfield, West Allis, Cudahy, Wauwatosa, and Bay View. For a detailed on how our hybrid property management approach has enabled landlords to save thousands, please refer to this case study.


Chad Gipson

Content Director at PortfolioBay