For Owners Hiring a Property Manager, the Fee Is the Wrong Number to Compare

Written by:

Heather Hook

Date:

31 Aug 2026

KeyCrew Studio

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When an owner sets out to hire a 3rd party management company, the comparison almost always starts, and often ends, with the management fee. It is the number every firm quotes, the one that fits on a single line, and the one that feels like the lever an owner controls. According to operators who have sat on both sides of the table, it is also close to the least important figure in the decision.

Ron Kutas, Chief Executive Officer of OneWall Communities, an owner-operator that also provides 3rd-party management services, argues that fixating on the fee steers owners away from where the real money moves.

Where The Real Money Moves

Kutas puts the mismatch in plain arithmetic. A 25 basis point cut on the management fee for a property with a $2 million rent roll saves an owner about $5,000 a year. A 200 basis point difference in bad debt at that same property is roughly $40,000. “You’re negotiating one of the smallest numbers on the page,” he says. The questions that actually move the outcome, in his view, are how quickly a manager turns units and what its bad-debt policy looks like.

He goes further on the fee itself. A manager willing to drop from 3 percent to 2.5 percent has to recover that half point somewhere. Often, he says, it returns as higher billbacks, more home-office personnel charged to the property, or simply less attention paid to the asset. A fee that looks too low to be profitable usually is not as low as it appears.

The Chargeback Question

The line Kutas says owners should press on is chargebacks, the costs a management company bills back to the property on top of the fee. He frames it as a test. Ask a manager to walk through every billback beyond the management fee. A revenue-driven company tends to be vague. An owner-operator, he says, has a schedule ready to send and can explain why each charge exists and what it covers.

Reading The Reporting

The reporting itself carries tells before an owner ever signs. Kutas points to generic parent accounts on the chart of accounts as a warning sign: a single “repairs and maintenance” line rather than a breakdown into paint, electrical, plumbing, and the rest. “The less detail, the more concerned I’d be,” he says. Thin reporting, in his experience, is where undifferentiated spending hides.

Part of why owners struggle here, he notes, is that the industry has no shared standard. Chart-of-account structures differ from firm to firm, as do bad-debt policies and the thresholds at which an expense needs approval, anywhere from $500 to $1,000 to a set percentage over budget. That fragmentation has left the expense side opaque, which is exactly why the fee, the one clearly visible number, becomes the default thing to haggle over.

A People Business

Two of the questions Kutas tells owners to ask are about people, not price. First: who is the regional manager assigned to the property, what is their record, and how long have they been with the firm? A regional just starting out, or with no experience in that asset type, is a reason for caution. Second: what backup exists when a community manager goes on leave or a service manager is out for two weeks? An owner should know whether the firm has a genuine bench or leans on temporary labor to fill gaps. Kutas says [lack of] bench strength [in a given market] is one of the most common reasons OneWall itself declines an assignment.

Bad Manager or Bad Market

Owners also misdiagnose underperformance, blaming a manager for what is really a soft market, or the reverse. Kutas’s test is data paired with self-awareness. Market performance can be checked against publicly available figures. And an ownership pattern tells its own story: “If you’re on your third manager in four years, it’s probably not the management company.”

That willingness to name the owner’s role points to a signal Kutas thinks owners undervalue: a manager prepared to turn business down. “We sell attention and labor,” he says. A firm that stretches itself thin to win every contract is, by his logic, less able to do right by any single one. As owners grow more skeptical of headline fees and more attentive to the expense side, the managers who can answer the harder questions in detail are likely to separate themselves from those who compete on price alone.

About OneWall Communities: OneWall Communities is a vertically integrated property management and investment firm specializing in workforce housing. With 15 years of owner-operator experience, OneWall has evolved to offer institutional-level 3rd party management services that combine operational excellence with a community-first approach. For more information, visit onewallcommunities.com.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.

Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.