Hiring a property manager is a business decision, and like any business decision, understanding the cost structure is essential. Property management fees in Texas vary by company, property type, and service level. Knowing what to expect helps you evaluate proposals and find the right fit for your investment.
Here is a breakdown of common property management fees and what they should include.
The Two Main Fee Types
Almost every property management company in Texas uses some combination of two core fees: a monthly management fee and a leasing fee (also called a placement fee or tenant placement fee). Everything else is typically an add-on.
Monthly Management Fee
This is the ongoing fee for day-to-day management of your property. In the Austin metro and across Central Texas, monthly management fees typically fall in one of two structures:
- Percentage of collected rent: Usually 8% to 12% of monthly rent collected. For a property renting at $2,000 per month, that means $160 to $240 per month.
- Flat fee: Some companies charge a fixed monthly amount regardless of rent, typically $100 to $200 per month.
The percentage model aligns the manager’s incentive with yours. When they keep the property rented at market rate, they earn more. The flat fee model provides predictability but removes that alignment.
What the monthly fee should include:
- Rent collection and accounting
- Tenant communication and customer service
- Maintenance coordination (receiving requests, dispatching vendors)
- Monthly financial statements
- Lease enforcement
- Property inspections (frequency varies by company)
- Year-end tax documentation (1099s, expense reports)
If a company charges a management fee but then adds separate charges for rent collection, statements, or basic communication, that is a red flag.
Leasing Fee (Tenant Placement)
This one-time fee covers the work of finding and placing a new tenant. In Texas, leasing fees typically range from 50% to 100% of one month’s rent.
What it should include:
- Marketing the property (MLS listings, online platforms, signage)
- Showing the property to prospective tenants
- Processing applications
- Tenant screening (credit, background, income verification, references)
- Lease preparation and execution
- Move-in inspection and documentation
Some companies split this into a “leasing fee” and a separate “marketing fee.” Be cautious of that structure. The total cost is what matters, and splitting fees can obscure the real price.
Additional Fees You May Encounter
Lease Renewal Fee
Some companies charge $150 to $300 each time a lease is renewed. Others include renewals in the monthly management fee. Since renewals require less work than new placements, this fee should be significantly less than the leasing fee.
Maintenance Markup
Many property managers add a markup of 10% to 20% on maintenance and repair work. This covers the time spent coordinating vendors, reviewing bids, and overseeing quality. Some companies use in-house maintenance teams instead, which can reduce costs but may limit your options for specialized work.
Ask specifically how maintenance is handled and billed. A company that coordinates competitive bids from multiple vendors will generally save you more money than one that uses a single preferred contractor for everything.
Vacancy Fee
Some companies charge a reduced monthly fee even when the property is vacant. This is less common and generally not in the owner’s favor. If a property is vacant, the manager should be motivated to fill it quickly, not billing you for an empty unit.
Setup or Onboarding Fee
A one-time fee of $100 to $500 for the initial setup of your account, property inspection, and systems configuration. This is reasonable if it covers a thorough initial inspection and documentation process.
Eviction Coordination Fee
If an eviction becomes necessary, some managers charge a separate fee of $200 to $500 for coordinating the legal process (separate from actual attorney and court costs). Others include this in their standard management services.
Early Termination Fee
Most management contracts include a term (often 12 months) and charge a fee if you cancel early. This is standard in the industry, but the fee amount and contract terms vary widely. Read the cancellation clause carefully before signing.
Hidden Fees to Watch For
Not all property management companies are transparent about their fee structure. Watch for:
- Advertising fees charged on top of the leasing fee
- Inspection fees charged per visit beyond the standard schedule
- Bill pay fees for paying your mortgage, HOA, or insurance from rental proceeds
- Technology fees for owner portal access or online rent collection
- After-hours maintenance surcharges passed to the owner
A reputable company will provide a complete fee schedule before you sign. If a company is vague about additional charges or directs you to read the fine print for details, that is worth noting.
What Drives Fee Differences?
Several factors influence where a company’s fees fall within the market range:
Property type. Homes in suburban areas typically have lower management fees than multi-unit properties or homes in high-maintenance older neighborhoods.
Property value and rent. Higher-rent properties may command lower percentage-based fees because the dollar amount is already substantial. A 10% fee on $3,000 rent ($300 per month) delivers more revenue than 10% on $1,500 rent ($150 per month).
Service level. Full-service management that includes regular inspections, proactive maintenance planning, and detailed financial reporting costs more than basic rent collection and maintenance dispatching.
Company size and overhead. Larger companies with dedicated staff, established vendor networks, and professional technology platforms may charge more but can often deliver greater efficiency and consistency.
How to Evaluate the True Cost
Do not compare property management companies on fees alone. The cheapest option can easily become the most expensive if the manager takes weeks to fill vacancies, places poorly screened tenants, or fails to coordinate timely maintenance.
Calculate the total annual cost of each management option, including all fees, then weigh that against the value of the services provided. A company that charges 10% but keeps your property occupied with quality tenants and well-maintained is far more valuable than one that charges 6% and lets problems compound.
Questions to Ask Before Hiring
- What is your total fee structure? List every possible charge.
- What is included in the monthly management fee?
- How do you handle maintenance requests and vendor selection?
- What is your average time to fill a vacancy?
- What is your eviction rate?
- How often do you inspect properties?
- What does your owner reporting look like?
- What are the contract terms and cancellation provisions?
Our Approach
At Kendall Creek Properties, we believe in transparent pricing with no hidden fees. Our property owners know exactly what they are paying for and what they receive in return. We focus on keeping properties occupied with qualified tenants, maintaining the asset proactively, and delivering clear financial reporting every month.
Understanding property management fees is the first step toward making a smart hiring decision. Ask the right questions, compare total value rather than just price, and choose a partner who treats your property like the investment it is.
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