Property management pricing can be a little confusing because the monthly management percentage is only one part of the picture. Depending on the company and the services you need, there may also be leasing fees, tenant-placement fees, renewal fees, inspection charges, maintenance coordination fees, or other costs.

So rather than simply comparing percentages, it helps to look at the entire package.

Start With the Monthly Management Fee

Most full-service property management companies charge a percentage of the monthly rent they manage.

Placerville Realty's published pricing currently lists an 8% monthly management fee. For example, if your property rents for $2,500 per month, an 8% management fee would be $200 for a month in which that fee applies.

Simple enough, right?

Usually—but it's still worth asking a few questions.

For example, is the percentage calculated on rent that is charged, or only on rent that is actually collected? Is there a minimum monthly fee? And what happens if the property is vacant?

Those details can make a difference, especially when you're comparing two companies whose advertised percentages look similar.

Don't Forget About Leasing and Tenant-Placement Fees

Finding a good tenant takes work. There's advertising, answering inquiries, showing the property, screening applicants, preparing the lease, coordinating move-in, and making sure everything is properly documented.

Because of that, property management companies charge a separate leasing or tenant-placement fee when they place a new resident.

For full service management, Placerville Realty's published pricing page currently lists a charge of 40% of one month's rent for tenant placement. Rent-only (where we find a tenant but you manage the property yourself) usually costs the equivalent of one month's rent.

Property owners should confirm exactly which fee applies to their situation. In other words, don't assume every number shown on a pricing page is automatically added together.

Ask for a written proposal showing exactly what your property would cost to manage.

So What Does a Leasing Fee Actually Include?

This is another area where property management companies can vary quite a bit.

Before hiring a manager, ask what happens from the moment your property becomes available until the new tenant receives the keys.

Some useful questions include:

• Who pays for advertising?
• Are professional photographs included?
• Who handles property showings?
• What type of tenant screening is performed?
• Who prepares the lease documents?
• Is there a tenant-replacement guarantee?
• Is the move-in inspection included?

You don't necessarily want to choose the company with the lowest leasing fee. You want to understand what you're receiving for that fee.

Ask About the Smaller Fees Too

This is where comparing property management proposals can get tricky.

One company may charge a slightly higher monthly percentage but include several services that another company bills separately.

Before signing an agreement, ask whether there are separate charges for things such as:

• Lease renewals
• Property inspections
• Serving notices
• Maintenance coordination
• Vendor invoice markups
• Advertising
• Accounting or year-end reporting
• Property setup or onboarding

None of these fees are automatically unreasonable. The important thing is knowing about them ahead of time.

A good management agreement should make it clear what is included and what isn't.

Maintenance Is Worth a Separate Conversation

For many landlords, maintenance is one of the biggest reasons they hire a property manager in the first place.

After all, most owners don't want to spend their evenings tracking down plumbers, coordinating HVAC repairs, or figuring out whether a tenant's repair request is truly an emergency.

When comparing companies, ask how maintenance is handled.

For example:

• Does the management company charge a maintenance coordination fee?
• Do they add a markup to vendor invoices?
• Can you see the original contractor invoice?
• At what dollar amount does the manager need your approval before authorizing a repair?
• How are emergency repairs handled?
• Does the company keep an owner reserve on hand for repairs?

You should also understand what happens to any reserve funds when management ends.

These may seem like small details when you're first interviewing a property manager, but they can become very important later.

The Cheapest Management Company Isn't Always the Least Expensive

It's natural to focus on fees when you're comparing property managers. Nobody wants to overpay.

But property management expenses aren't the only costs a landlord faces.

Vacancy costs money too.

So do missed rent increases, poor tenant screening, delayed maintenance, unnecessary repairs, and the owner's own time spent managing problems.

A company charging a little more may still provide better overall value if it helps reduce vacancy, communicates well, handles maintenance efficiently, keeps good records, and saves you from having to manage the property yourself.

On the other hand, paying a higher fee doesn't automatically mean you'll receive better service either.

That's why comparing the actual scope of services matters more than simply comparing percentages.

Ask to See a Sample Owner Statement

This is one of the simplest things you can do before hiring a property manager.

Ask to see an example of the monthly statement an owner receives.

You should be able to clearly understand:

• Rent collected
• Management fees
• Maintenance expenses
• Vendor payments
• Owner distributions
• Reserve balances

You may also want to ask when owner proceeds are normally distributed each month and how security deposits and other funds are handled. Some managers wait until mid-month before they send funds to owners - others pay immediately when the rent is received.

Clear accounting can save everyone a lot of frustration later.

What Should a Property Management Proposal Actually Tell You?

A good proposal shouldn't leave you guessing.

Ideally, ask the property manager to give you an example based on the expected rent for your property.

For instance, if your home is expected to rent for $2,700 per month, ask:

"Can you show me exactly what I would pay during a normal month, what I would pay when you place a new tenant, and what other fees I could reasonably expect during the year?"

That's a much more useful comparison than simply asking, "What's your percentage?"

You should also understand when a leasing fee becomes payable. Is it charged when the lease is signed? When the tenant moves in? After the first month's rent has been collected?

Again, the goal isn't to find a company with no fees. The goal is to avoid surprises.

One More Question: What Happens When Management Ends?

This isn't something most property owners think about when they're hiring a manager, but it's worth asking.

What happens if you eventually sell the property or decide to change management companies?

The agreement should explain things such as:

• How much notice is required to terminate management
• Whether there is a termination fee
• How tenant records are transferred
• How remaining owner funds are returned
• What happens to maintenance reserves
• How security-deposit records are transferred

A professional management relationship should be clear at the beginning, during the relationship, and when the relationship eventually ends.

The Bottom Line

If you're comparing property management companies in Placerville, El Dorado Hills, Cameron Park, Shingle Springs, Pollock Pines, Diamond Springs, or elsewhere in El Dorado County, don't make your decision based on one percentage.

Instead, compare the entire management package.

Look at the monthly management fee, leasing costs, maintenance policies, included services, communication, reporting, and the amount of work you would still be responsible for as the owner.

Most importantly, ask for everything in writing.

A clear proposal makes it much easier to compare companies fairly—and helps prevent misunderstandings after management begins.

If you'd like to see Placerville Realty's current published pricing, you can review our property management pricing here and contact us for a current written proposal based on your specific rental property.

Owner takeaway: Don't just ask, "What's your management fee?" Ask, "What will it realistically cost to manage my property over an entire year—and what exactly is included?"