What management really costs across a whole year
The percentage in the brochure is not the cost of management. The cost is that percentage of the rent actually collected, plus every leasing fee each time a tenancy turns over, plus renewal fees, plus the markup on the maintenance the manager coordinates, plus the flat monthly charges, all carried across a year that includes vacancy. This page adds the whole stack for your portfolio: rent and vacancy first, then each fee in its own line, and it reports the figure landlords actually compare: the total annual cost expressed as an effective percentage of the rent collected, and per unit per month.
The portfolio and its rent
The management fee
Leasing, renewals and maintenance
Minimum, contingency, tax and range
Disclaimer: This calculator gives estimates for general information only. It is not financial, medical or other professional advice. What a manager may charge, and for what, is set by your management agreement and local rules for licensed managers; this page prices the agreement you describe, it does not judge it.
What this calculator does
It costs property management the way a landlord’s year actually runs. Gross potential rent comes first, the theoretical maximum if every unit were let every month; vacancy takes its share; and what remains, rent collected, is the base the percentage fee is truly charged on. Each charge in the agreement then gets its own annual line: the headline fee under either structure (a percentage of collected rent, or a fixed amount per unit per month), leasing fees driven by how many tenancies actually turn over, renewal fees, the markup on coordinated maintenance stated against the spend it marks up, and flat monthly charges annualised. The results translate the stack into the two comparisons that matter: what share of every collected rent dollar management consumed, and what each unit cost per month to be managed.
How to use it
- Compare agreements on the effective percentage, never the headline. A lower percentage with leasing fees, renewal fees and a maintenance markup can cost more than a higher percentage that is genuinely all-in: on this page’s example an 8% headline becomes 12.18% of collected rent once the stack is counted. The effective figure is the only one that ranks two offers honestly.
- Turnover is a fee multiplier. Leasing fees are charged per placement, so a portfolio that turns over every year pays them every year. Tenancy length quietly decides what management costs; pricing the placements you actually expect, rather than the brochure’s assumption of stability, is where the estimate gets honest.
- The maintenance markup prices coordination, and doubles as a warning. A markup on coordinated spend pays the manager for arranging trades, and it also pays more when more is spent. Knowing the markup percentage, and seeing it expressed in dollars against your real maintenance spend, is how a landlord keeps that incentive visible rather than discovered.
- Vacancy cuts both ways and the page shows both. Empty months reduce the percentage fee (there is no collected rent to charge on) while reducing income far more. A manager quoting fees “on rent” means collected rent, and the vacancy line here keeps the agreement’s basis explicit.
- Fixed versus percentage is a bet on rent. A fixed per-unit fee is predictable and becomes a smaller share as rents rise; a percentage fee rises with the rent roll. The results show the fee per unit per month in either mode, so the two structures can be compared at today’s rent and reasoned about at tomorrow’s.
How it is calculated
- Gross potential rent = units x rent per unit per month x 12. Vacancy loss = gross potential rent x vacancy %. Rent collected = gross potential rent less vacancy loss.
- Management fee: percentage mode = rent collected x fee percentage; fixed mode = fee per unit x units x 12. Leasing fees = placements per year x fee per placement. Renewal fees = renewals x fee each. Maintenance markup = maintenance coordinated x markup %. Other charges = monthly charges x 12.
- Subtotal = the sum of the fee lines. Minimum charge: if a minimum annual charge is entered and exceeds the subtotal, the minimum becomes the base and the results state that the minimum charge applied. Contingency applies once to the base; tax once to base plus contingency. Total = base + contingency + tax.
- Effective cost = total / rent collected, as a percentage. Per unit per month = total / units / 12. Money lines are rounded to cents before summing.
Worked examples
Four units, one honest total. Illustrative figures: 4 units at $1,850 a month give gross potential rent of $88,800.00. Vacancy at 6% loses $5,328.00, leaving rent collected of $83,472.00. An 8% fee on collected rent is $6,677.76. Two placements at a $925 leasing fee add $1,850.00; two renewals at $250 add $500.00; a 10% markup on $6,000 of coordinated maintenance adds $600.00; flat monthly charges of $45 add $540.00. The year’s management costs $10,167.76 in total: an effective 12.18% of the rent collected, and $211.83 per unit per month. The 8% in the brochure and the 12.18% on the landlord’s year are both true; only one of them budgets.
The same portfolio on a fixed fee. At $150 per unit per month, the headline fee is $7,200.00 a year, more than the percentage fee’s $6,677.76 at today’s rent (which works out to $139.12 per unit per month). If rents rise 10% while the fixed fee holds, the percentage fee grows with the roll and the fixed fee quietly becomes the cheaper structure. Neither structure is better in general; each is a position on future rent, and the page prices both.
A single unit meets the minimum. One unit at $900 a month collects $10,800.00 a year; an 8% fee is $864.00, against a $1,200 minimum annual charge in the agreement. The total is the minimum, $1,200.00, an effective 11.11% of collected rent. Minimums exist precisely at this end of the market, and small landlords are the ones who should model them.
Reading your results
Read the effective percentage as the price of the service and everything else as its anatomy. If the effective figure surprises you, the lines show which charge did it: usually turnover (leasing fees) or the maintenance markup, both of which are negotiable in structure even when the headline percentage is not. Then set the total against the alternative honestly priced: self-managing costs the landlord’s own hours, which are not free, only unbilled. The comparison this page enables is agreement against agreement and management against self-management at a stated value of your time, not management against zero.
Limitations
- Charges not in the agreement are not in the estimate. Court and eviction support, major-project supervision, letting advertising passed through at cost, and after-hours callouts are commonly charged outside the standard stack. The contingency field carries an allowance for them; the agreement’s fee schedule is the authority.
- One rent figure stands for the portfolio. Mixed rents are handled by averaging or by running the page per rent band. Vacancy, too, is a single portfolio rate here, while real vacancy is lumpy: one unit empty for a quarter is a different experience from all units briefly empty, at the same annual figure.
- Leasing fees are entered flat. Agreements often set them as a share of a month’s rent or of the first month’s rent collected. Convert that share to dollars at your rent before entering it, so the line prices your tenancies rather than a formula.
- The value side is out of scope. Good management buys tenancy length, rent achieved and maintenance priced well, none of which appear in a cost total. This page prices the cost of the agreement completely; whether the service earns it is a judgement the numbers inform but cannot make.
Frequently asked questions
What does property management really cost per year?
Everything in the agreement, carried across a year: the headline fee on rent actually collected, plus leasing fees for each new tenancy, renewal fees, any markup on maintenance the manager coordinates, and flat monthly charges. On this page’s example (4 units, $83,472 collected) an 8% headline becomes $10,167.76 for the year, an effective 12.18% of collected rent. The headline percentage alone understates the cost of almost every real agreement.
Is a percentage fee or a fixed fee better?
Neither in general. At this page’s example rent, 8% of collected rent is $139.12 per unit per month, cheaper than a $150 fixed fee today; the fixed fee wins if rents rise while it holds, because it does not grow with the roll. The percentage fee also falls automatically in vacant months. The structures differ in who carries rent and vacancy risk, and the right choice depends on the landlord’s expectation for both, which is why the page prices either.
Why is the fee charged on rent collected, not rent owed?
Because standard agreements charge on money actually received: a percentage of an unpaid rent would charge the landlord for income that never arrived. That is also why vacancy appears on this page even though it is not a management charge: it sets the base the percentage applies to, and it reminds the comparison that the fee falls in empty months while most other costs of ownership do not.
What is a maintenance markup, and should it be in the agreement?
It is a percentage added to trades’ invoices for work the manager arranges, paying for sourcing, scheduling, access and oversight. Whether it belongs in an agreement is a negotiation; that it should be visible is not. A landlord who knows the markup (10% on $6,000 of coordinated work is $600.00 here) can compare it with the cost of coordinating directly, and can ask whether large jobs are marked up at the same rate as small ones.
Related calculators
Method: annual cost model built on rent collected after vacancy, with each agreement charge as its own line and the total expressed as an effective percentage of rent collected, exactly as defined on this page. Last reviewed: 13 October 2026.