A property manager runs a rental on the owner’s behalf, and the services property managers provide cover the full life of a tenancy: marketing the unit, screening applicants, drafting the lease, collecting rent, coordinating repairs, keeping the property legally compliant, and handling evictions when things go wrong. Most charge a monthly fee of 8 to 12 percent of collected rent, with additional charges for placing new tenants and, sometimes, for coordinating maintenance. The written management agreement sets the exact boundaries of what the manager is authorized to do.
Finding and Placing Tenants
Filling a vacancy starts with pricing. Managers look at comparable listings in the area to set a rent that fills the unit quickly without leaving money on the table. They write the listing, take or arrange photographs, and push it out through syndication services that distribute to the major rental platforms at once.
Showings and screening come next. A typical application review includes a credit report, employment and income verification, and reference checks with previous landlords. Applicants usually pay a fee of $25 to $75 to cover the cost of running those background checks. The point of the process is to identify tenants with the financial track record and rental history to pay reliably and treat the property well.
If the property accepts Housing Choice Vouchers (Section 8), the manager handles the extra steps: coordinating the housing authority’s inspection, completing the Request for Tenancy Approval, confirming the unit meets housing quality standards, and setting up direct deposit for the government-paid portion of the rent.
Lease Preparation and Move-In
Once an applicant is approved, the manager drafts the lease. It covers rent, due date, term, pet policy, maintenance responsibilities, and house rules. A clear lease is the document most disputes are resolved by, so this is not boilerplate work.
Before the tenant takes possession, the manager walks the unit and documents the condition of every room, fixture, and appliance, usually with timestamped photographs. That move-in report is what justifies any deductions from the security deposit later. Most managers store the inspection digitally so both the owner and tenant can pull it up.
Rent Collection and Owner Reporting
Rent typically comes in through an online portal where tenants pay electronically. Automated collection cuts down on late payments and gets money to the owner faster. Some portals pass a small convenience fee to the tenant for credit card use.
When rent is late, the manager enforces the lease. That means issuing a late notice and assessing fees allowed under the lease and local law. Many states cap late fees around 5 percent of monthly rent, though the rules vary. Managers also track partial payments and stay in contact with the tenant before an unpaid balance turns into a formal legal notice.
Each month the owner receives a financial statement showing rent collected, expenses paid, vendor invoices, and the net amount deposited. Those statements create the paper trail you need at tax time without having to chase individual receipts.
Rent Increases
When the market supports a higher rent, the manager researches comparables, sets the new amount, and delivers written notice to the tenant on the timeline the law requires. Most jurisdictions require at least 30 days’ notice, and some require 60 or 90 depending on the size of the increase or the lease type. The manager makes sure the notice meets local formatting and delivery requirements so it will hold up if the tenant challenges it.
Reserve Funds
Many agreements require the owner to keep a reserve on hand so the manager can pay for emergency repairs without waiting for approval on every invoice. HUD recommends multifamily owners hold at least $1,000 per unit for replacements and emergencies, with the right amount depending on the age and condition of the property.1U.S. Department of Housing and Urban Development. Reserve Fund for Replacements – HUD Handbook 4350.1 For single-family rentals, managers typically ask for an initial deposit of $300 to $500 in the operating account.
Security Deposit Handling
At move-in the manager collects the security deposit — usually one or two months’ rent — and holds it in a separate account rather than mixing it with operating funds. Some states require the deposit to sit in an interest-bearing escrow account, and the manager tracks any interest owed to the tenant.
At move-out, the manager inspects the unit against the move-in report. Normal wear and tear cannot be deducted. Damage beyond ordinary use, unpaid rent, and cleaning costs can be. The manager prepares an itemized statement and returns whatever is left to the tenant within the state’s deadline. Deadlines range from 10 to 60 days depending on the state, with 30 days the most common. Missing the deadline can trigger penalties against the landlord, so managers watch those dates closely.
Maintenance and Physical Upkeep
Keeping the property in good condition is a two-part job: preventive work on a schedule, and repairs on demand.
Preventive Maintenance and Inspections
Managers inspect the property once or twice a year to catch slow leaks, deteriorating caulking, HVAC inefficiencies, and other problems before they become expensive. Those inspections feed a preventive calendar: seasonal HVAC servicing, gutter cleaning, roof checks, exterior upkeep. Staying ahead of wear extends the life of the property’s systems and reduces emergency calls.
Repair Coordination
When a tenant reports an issue, the manager is the single point of contact. They assess the problem, send the right contractor, and check the work before releasing payment. For emergencies like burst pipes, electrical failures, or heat loss, they handle around-the-clock response.
Good managers keep a bench of licensed, insured contractors and confirm each vendor’s general liability and workers’ compensation coverage before assigning work. Some add a markup of 10 to 15 percent on contractor invoices to cover coordination and oversight; that practice should be disclosed in the management agreement.
Habitability and Safety
The manager also keeps the property compliant with basic habitability requirements. That means working smoke and carbon monoxide alarms, adequate heating, weatherproofing, and attention to environmental hazards like mold or lead paint. When something is wrong, the manager arranges remediation promptly to protect both the tenant and the owner’s exposure to code enforcement.
Legal Compliance and Evictions
A large part of what you pay a property manager for is keeping you on the right side of landlord-tenant law. Mistakes in screening, lease enforcement, or eviction procedure can turn into lawsuits or regulatory penalties.
Fair Housing
The federal Fair Housing Act prohibits discrimination in rental housing based on race, color, religion, sex, national origin, familial status, or disability.2Office of the Law Revision Counsel. 42 USC Chapter 45 – Fair Housing Managers apply these rules in how listings are worded, how applications are evaluated, and how lease terms are set. Using standardized screening criteria for every applicant is how they avoid even the appearance of unequal treatment, and how they protect the owner from complaints filed with HUD or state agencies.3U.S. Department of Housing and Urban Development. Fair Housing – Rights and Obligations
Assistance Animals
Under the Fair Housing Act, landlords must make reasonable accommodations for tenants with disabilities who need an assistance animal, including emotional support animals, even where the property has a no-pets policy. Pet fees and deposits cannot be charged for these animals. When the disability and need are not obvious, the manager may request reliable documentation from a healthcare provider. The accommodation must still be granted unless the specific animal is a direct threat to others or would cause significant property damage no other accommodation could prevent.4U.S. Department of Housing and Urban Development. Assistance Animals Mishandling these requests is one of the most common sources of fair housing complaints, which is why experienced managers follow HUD’s guidance closely.
Lease Violations and Eviction
When a tenant breaches the lease — nonpayment, unauthorized occupants, damage, or other violations — the manager serves the formal notice the law requires. For unpaid rent, that is usually a pay-or-quit notice giving the tenant a set number of days to pay or move. For other breaches, a cure-or-quit notice gives the tenant a chance to fix the problem. These notices are legally required before an eviction can proceed.
If the tenant does not comply, the manager files the eviction case in local court. Filing fees vary widely by jurisdiction. The manager handles service of the paperwork, assembles evidence of the lease breach, and either appears at the hearing or coordinates with an attorney. If the court grants the eviction, the manager works with local law enforcement for the lawful removal of the tenant and secures the property afterward.
Belongings Left Behind
When a tenant leaves possessions in the unit after an eviction or abandonment, the manager cannot simply dispose of them. Most states require written notice to the former tenant, a storage waiting period, and specific disposal procedures. The manager handles this process so the owner is not exposed to a conversion or wrongful disposal claim. Timelines and notice requirements vary by state.
What Property Managers Charge
Fee structures differ, but most follow the same pattern.
- Monthly management fee. Usually 8 to 12 percent of monthly collected rent. On a unit renting for $1,800, that is $144 to $216 a month. It covers day-to-day operations: collection, tenant communication, maintenance coordination, and reporting.
- Tenant placement fee. A one-time charge of 50 to 100 percent of one month’s rent each time the manager fills a vacancy. On the same $1,800 unit, that is $900 to $1,800. It covers marketing, showings, screening, and lease preparation.
- Maintenance markup. Some managers add 10 to 15 percent to contractor invoices for coordinating repairs. Others fold this into the monthly fee. Check how yours bills it.
- Lease renewal fee. Often $150 to $300, or a reduced percentage, when an existing tenant renews — less work than placing a new one.
All of this should be written into the management agreement before you sign.5SEC. Property Management Agreement – Exhibit 10.14 Ask what triggers each fee, who pays which expenses, and how the contract can be terminated. Many agreements require 30 to 90 days’ notice to end the relationship, and some charge a cancellation fee.
Tax Reporting the Manager Handles
Property management fees are deductible as operating expenses on your federal return. The IRS lets landlords deduct management fees, repairs, insurance, advertising, and other expenses needed to run a rental, all reported on Schedule E of Form 1040.6Internal Revenue Service. Publication 527 – Residential Rental Property Other deductible rental expenses include depreciation, mortgage interest, property taxes, and insurance premiums.7Internal Revenue Service. Topic No. 414 – Rental Income and Expenses
Your manager also has a reporting duty to you. When they collect rent on your behalf, they must send you a Form 1099-MISC reporting the total rent paid over during the year if it reaches $600.8Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC Keep the monthly statements they send you throughout the year; they make reconciliation at tax time much easier.
Licensing and Insurance to Verify Before Hiring
Before signing with a manager, check their credentials against your state’s requirements. The vast majority of states require property managers to hold a real estate broker’s license or to work under a licensed broker. A few offer a property-management-specific license, and a handful have no licensing requirement at all. Owners managing their own properties are generally exempt. License status can be verified through your state’s real estate commission.
Also look for errors and omissions insurance, sometimes called professional liability coverage. It protects against claims arising from mistakes in the manager’s professional duties, such as mishandling a deposit or failing to disclose a material defect. Many management agreements also ask the owner to name the management company as an additional insured on the property’s liability policy, which gives both parties shared protection if a tenant or visitor is injured on the premises.