What property management fees actually cover, and what to ask before you sign

Most residential property management in Greater Boston is priced the same way: a percentage of collected rent each month, plus a one-time leasing fee when a new tenant is placed. The headline percentages cluster in a narrow band, which is exactly why comparing managers on that number alone tells you very little.

The real cost difference between two managers charging the same percentage is usually somewhere else entirely.

Collected rent or scheduled rent

This is the first question, and it is not a technicality. A fee on collected rent means the manager earns nothing during a vacancy or a non-payment — their income moves with yours. A fee on scheduled rent means they are paid on the rent the lease says is due, whether or not it arrived.

The second arrangement is defensible in principle and it is worth understanding what it does to the incentives. It removes the manager’s financial stake in exactly the two situations where you most want them motivated.

The charges that are not in the percentage

• Leasing or tenant placement fee — usually a large share of one month’s rent, charged each time a new tenant is placed.
• Renewal fee — charged when an existing tenant stays. Ask whether there is one and what it is.
• Maintenance markup — a percentage added on top of vendor invoices. A common and quiet source of cost.
• Setup or onboarding fee.
• Inspection fees, per visit.
• Eviction coordination or court-attendance fees.
• Statement, technology or administrative fees.
• Early termination fee if you leave the agreement.

None of these is improper. What matters is whether they are disclosed up front or discovered on the third statement. A manager who will not put their whole fee schedule in writing before you sign is telling you something about what the schedule contains.

Maintenance markup deserves particular attention

A percentage added to every vendor invoice creates an incentive that runs against yours: the more repair work flows through the property, the more the manager earns. It is not evidence of bad faith and plenty of reputable firms charge it. But it is worth knowing about, because it is the fee most likely to be material over a year and the one least likely to appear in a pricing comparison.

Ask directly: is there a markup on vendor invoices, and what is it? Then ask whether you see the original invoice on your statement or only the marked-up figure.

What the fee should be buying

Rent collected and disbursed on a stated date. An itemised monthly statement with source documents. Maintenance triaged the day it is reported, with a spending threshold you set. Screening against written criteria. Compliance work — registration, inspections, disclosures, deposit handling — done and documented. And being told about anything material on the day it happens rather than at the end of the month.

If you are comparing two managers, compare those. The percentage is the least informative number in the conversation.