Property Management
The professional oversight of rental real estate on behalf of property owners, encompassing tenant relations, maintenance, rent collection, and legal compliance.
What is Property Management?
Property management is the operation, control, and oversight of residential or commercial real estate by a professional property manager or management company on behalf of the property owner. Property managers act as the owner's agent and typically handle: marketing vacant units, screening and selecting tenants, executing lease agreements, collecting rent, coordinating maintenance and repairs, conducting property inspections, managing vendor relationships, enforcing lease terms, handling tenant complaints, managing evictions when necessary, and providing periodic financial reporting to the owner. Property management fees for residential rentals typically range from 8%–12% of monthly collected rent, plus leasing fees (often 50%–100% of one month's rent for placing a new tenant) and maintenance markup charges. Professional property management is most valuable for investors who own multiple properties, live far from their rentals, or lack the time or expertise to self-manage. In exchange for fees, owners get passive income without day-to-day operational involvement.
Example
An investor owns three single-family rentals across two cities and hires a property management company at 9% of collected rent. On a combined $4,800/month in rent, the management fee is $432/month ($5,184/year). The property manager handles all tenant communications, repairs under $300 without prior owner approval, conducts annual inspections, and provides monthly financial statements. When a tenant vacates, the manager markets the property, screens applicants, and places a new tenant—charging a one-month leasing fee. The investor's only active role is approving large capital expenditures and reviewing monthly reports.
Source: National Association of Realtors — Property Management