Property Management Blog

What Types of Fees Can I Expect When Using a Property Management Company in Phoenix?

Dora Pinter - Monday, July 17, 2017


All of the fees you pay for professional property management in Phoenix are negotiable. Nothing is set in stone, and each company charges what they feel is right for their services. Today, we’re talking about how that works.


Flat Fee or Percentage Fee

Some management fees are flat fees, and others are a percentage of the gross monthly rent. That means if you earn $1,200 on your property, a 10 percent management fee, which is common, costs you $120 per month. Compare this to flat fees, which can be $50, $75, $100, or $200. They are all over the place.


Comparing Management and Leasing Fees

Some companies charge more up front and less later, or the other way around: they may not have an up-front leasing fee. Leasing fees are one-time charges that can also be a flat amount or a percent of rent. They can range from a few hundred dollars to twice the monthly rent. Some companies may have a low monthly fee but a high leasing fee. It depends on how often they lease to know whether they are effective. Some companies will have lease renewal fees as well. Why should you pay this? When a tenant renews a lease, a lot of work goes into it. They renew because they’ve received good service and because your property manager was able to discuss potential rent increases successfully.


Other fees can include administrative fees, cancellation fees, and a number of others. Study each management contract so you know what each company is charging.


True Cost of Phoenix Property Management

You need to focus on results, not fees. If you have a company charging a low fee and it takes them two months to find you a tenant, that low fee is also costing you two months of lost rent. If every year they have to find a new tenant because service is bad, you will have higher turnover costs and pay the leasing fee more often than you would with others. So, look for a good retention rate and make sure homes lease quickly.


Maintenance is also important. Some companies have an upcharge for overseeing and managing maintenance. If you put these things together; slow rent, no lease renewals, and a maintenance upcharge – the $10 or $30 you’re saving every month gets eaten up quickly. Look at the true cost. Talk about retention rates and vacancy rates. These things are much more important than how low the fee is. 


If you have any questions about Phoenix property management fees or you’d like to hear more about our services, please contact us at Service Star Realty.