Property Management Fees in California [2024 Edition]
If you’re a first-time property owner, you might be scratching your head wondering, “How much do property managers charge in California?”
The answer, as always, depends on many factors. However, you can get a ballpark estimate which can help you when number crunching and calculating a possible ROI.
From bustling Los Angeles to techy Silicon Valley, understanding these costs is often the first step in your financial planning. To help you on your investment journey, we’ve compiled a breakdown of property management costs in California in 2024.
Key Takeaways
- Property management companies typically offer two primary fee structures: a fixed rate fee or a monthly percentage fee.
- Besides the basic management fees, property managers may charge additional fees, each serving specific operational or contractual purposes.
- Property management fees can vary significantly by location within California. For example, fees range from 6% in San Francisco to 8-12% in Los Angeles.
- When choosing a property manager, consider their track record, fee transparency, their communication strategies, and their methods for tenant screening.
- Don’t just settle for one property manager. Shop around for one who best meets your needs and operates within your budget.
Property Management Fee Breakdown
Property management costs are usually one of two types of fee structures: a fixed rate or a monthly percentage of the rent.
Fixed Rate Fee
A fixed rate fee involves a consistent monthly charge, regardless of your rental income. This straightforward approach is typically easier to budget for as it remains constant regardless of the property’s performance.
Fixed fees are advantageous for properties with high rental incomes since the cost doesn’t scale with earnings. However, they might be less appealing for lower-income properties, where a percentage-based fee could be more economical.
Monthly Percentage Fee
More common in the industry, this fee is a percentage of the monthly rental income collected. The percentage typically ranges from 8% to 12% of the monthly rent.
This fee structure aligns the interests of the property manager with those of the owner; a vacant property results in no fees paid. The downside is that higher rental incomes mean higher fees.
Additional Fees in Property Management
Beyond the basic management fees, several other charges may apply throughout the engagement with a property management company, including:
Set-up fee
This is an initial fee that covers the cost of setting up a new account. This may include the integration of the property into the management software, initial property inspections, and setting up tenant ledgers. It’s typically a one-time charge.
Leasing fee
Charged for finding and placing a new tenant. This could be a flat fee or a percentage of the first month’s rent. It generally covers advertising costs, showing the property, screening potential tenants, and executing the lease agreement.
Lease renewal fee
This fee is for handling the paperwork and negotiation involved in renewing a tenant’s lease. It can be a flat fee or a percentage of the monthly rent.
Maintenance fee
Some managers charge a fee to coordinate repairs and maintenance. This could be a markup on the invoices from contractors or a separate flat fee per incident.
Late fee
A property manager will often retain late fees charged to tenants as compensation for dealing with the late payments.
Eviction fee
If eviction proceedings become necessary, this fee covers the cost of the legal process, including serving notices, court appearances, and executing an eviction.
Vacancy fee
Some management companies charge a fee during periods when the property is vacant. This fee is intended to cover the costs of maintaining the property and attempting to lease it.
Technology fee
This is a newer fee that covers the cost of property management software or online platforms used to manage the property, communicate with tenants, process payments, and more.
Reserve fund fee
This is a fund set aside for emergency repairs or unexpected expenses. It’s typically funded by withholding a portion of the rental income.
Early termination fee
If the property owner decides to terminate the management agreement early, this fee compensates the property management company for the anticipated loss of future income.
How Much Do Property Managers Charge in California?
Property management fees in California can vary significantly based on the location and the services provided. The property type can also have an impact, as the requirements for managing a single-family rental can differ significantly from multi-family rentals and other property types.
Here is a general idea of the property management rates in California among the largest metro areas.
| Metro | Monthly Management Fee |
| Los Angeles-Long Beach-Anaheim | 8-12% of rent collected |
| San Francisco-Oakland | 6% of rent collected |
| San Diego | 7-10% of rent collected |
| Riverside-San Bernardino | 8-10% of rent collected |
| Sacramento | 7-10% of rent collected |
| San Jose | 8-12% of rent collected |
| Silicon Valley | 6-8% of rent collected |
| Orange County | 8-10% of rent collected |
Average Property Management Fees for a Rental in California
Below, you’ll find the average property management fees in California, so you know what to expect:
| Fee Category | California Average |
| Setup fee | Around $400 |
| Placement fee | 50-100% of one month’s rent |
| Monthly management fee | 6-10% of monthly rent |
| Inspection fee | $50 to $100 per inspection |
| Maintenance management fee | 10% of maintenance costs |
How to Find the Right Property Manager For Your Needs
Finding the right property manager can significantly impact your rental property’s success and your return on investment. Here are key points to consider when selecting a property manager:
- Before searching for a property manager, clarify what services you need. Do you require full-service management, or just help with leasing and tenant screening?
- Look for a property manager with a solid track record in managing properties similar to yours. Check online reviews, ask for client testimonials, and consider their standing in the industry.
- Ensure that your property manager is an expert on the local market in California and is well versed in state of city specific landlord and tenant laws, as well as any rent control regulations in your area.
- Compare the fee structures, additional charges, and how these fees might affect your return on investment. Ensure there are no hidden fees and that all potential costs are transparent.
- Ensure your property manager uses modern technology to streamline operations, such as digital payment platforms, online tenant requests, and regular financial reporting.
- Ask potential property managers about their methods for checking tenant credit scores, criminal background, rental history, and employment.
The Bottom Line
If you plan on hiring a property manager in California, it’s best practice to shop around. Find a property manager who’s best suited to manage your property type at a price that fits your budget. This will save you money and set a foundation for a stress-free partnership.
Also – check out KeyCrew to quickly and easily search for the best property managers in California.
