UpperKey Blog

A Guide to Typical Property Management Fees

Property management fees will often be the single biggest factor that puts many landlords off from outsourcing dealing with the tenancies for their properties. Even landlords who don’t enjoy the idea of dealing with emergency repairs at all hours or are stretched for time might prefer to try and manage the property themselves rather than handing over a percentage of their rental income to a property agency.


Along with this, the property industry is well-known for not being very transparent and it can often be difficult to get clear pricing information for property managers or even understand what kind of property management service will be best for your needs.


The UpperKey has put together a handy guide to average property management fees to make it easier for landlords to understand how much they can expect to pay a managing agent to look after a rental property.



Vacation rental living room with large window and yellow sofa.
The cost of vacation rental property management varies depending on the services.


Property Management Fees

How much does property management cost? Property management fees would typically be charged at a percentage of the rental income that you are earning from the property. Most property agents offer a range of different property management packages, and it can sometimes be difficult to determine what the differences are between each service offered at different price points.


The typical property management fees that you can expect to pay for a service that deals with standard things such as collecting rent and chasing arrears, responding to tenant queries, inspecting the property, providing an emergency response, and maintaining the property are around 19% of the monthly rental income on average for a national agency, and around 18% for a local agency.


Depending on the offering of the manager, the cost of property management will vary.


Property Management Hidden Charges

What is the average cost of property management? Along with the 19% of the rental income that is charged by national property management agencies, you will also need to consider any hidden charges when determining how much it will cost you to hire a property management agency to look after your rental property.


Many agencies advertise their property management packages as ‘comprehensive’ or ‘all-inclusive’, which means that you might reasonably assume that the service that you pay for with your percentage of the rental income will include everything, but this is not always the case. T


here are several additional fees that managing agents charge that might increase the average property management fee you pay. Along with this, you will also find that there may be differences when it comes to what is charged for residential property management and industrial property management fees.


Financial Administration Fees

What do landlords pay for financial administration? Many property management agencies will charge a range of fees that are related to property financial administration. Some of the most common fees include charges for reporting to HMRC on behalf of non-resident landlords, charges for monthly financial reporting, fees for the payment of service charges to freeholders, and dispute handling charges if you wish to withhold funds from a tenant’s deposit.


Most of the above would be difficult to do without any assistance from a managing agent, but it’s worth noting that they are often services that you will be charged extra for.


Fees for Arranging Work

What do property management companies charge to arrange works on a property?


On average, most property agents will charge around ten to twelve percent of the invoice cost if they need to arrange works at a property that are ‘beyond the agreement scope’. However, while this might seem reasonable at first, research has shown that what is classed as the ‘scope of the agreement’ is narrower than you might expect. For example, some agents charge a ten percent fee if they are required to arrange repairs or maintenance on the property that cost more than just £300-400, which is typically the case for emergency repairs for issues such as leaks or hiring contractors for remedial work that might be required after a routine property inspection.


Often, the cost of common issues such as damp in a property that will need to be maintained and repaired will cost more than what the agent’s limit is, incurring a fee. For this reason, it is important for landlords to find out what the agent considers to be a reasonable cap before charges are applied to the invoice for arranging works, otherwise, you may find yourself paying extra to the agent for arranging essential maintenance that is required to keep the property in a tenantable condition.


Referral Fees

Some property management agencies will also receive referral fees from third-party contractors each time they book them for work that is required at a property that they manage. Although there is no direct cost to the landlord arising from these schemes, it’s worth bearing in mind that property agents who receive such fees do not have any incentive to find the best value contractors for the landlord, which could result in you paying more than you need to.


What to Look for in a Property Management Agency

While there are lots of hidden fees and expenses to keep in mind when it comes to property management that might understandably put some landlords off from using one, the good news is that when you know what you are looking for, it’s worth using a reputable property management service such as UpperKey where you know that your property is in good hands. Over time, it can save landlords hassle and money and be worth investing in for your peace of mind and to free up your personal time instead of having to be available for tenants around the clock.


When choosing a property management company, it’s worth speaking to other landlords for recommendations and look out for transparency when it comes to average costs and fees, especially in terms of any additional charges that you might be liable for, and when these might need to be paid.


Property management can get expensive for landlords, so it is worth understanding the average cost, hidden fees to avoid, and what to look for if you are choosing a property management agency. When you entrust your vacation rental to an Aibnb concierge service, you can enjoy guaranteed rent and minimal work.