Property management fees come up in almost every conversation I have with small investors who own 3 to 12 rentals in the West Metro. The question is straightforward: how much should you expect to pay?
I manage 13 doors myself and charge a flat $125 per month per property with no markups on repairs or tenant placement. Here is what I tell people when they ask about costs in Minnesota.
Typical percentage fees in Minnesota
Most companies in the Twin Cities charge 8 to 12 percent of the monthly rent. On a $2,000 rent that works out to $160 to $240 every month. Many also add a leasing fee of one month’s rent when you first place a tenant, and sometimes renewal fees.
That structure makes sense for larger portfolios, but for someone with 5 or 8 doors the percentage model can feel heavy once you add everything up.
Flat fee model and why I use it
I went flat rate because small investors told me they wanted predictable costs. At $125 a month you know exactly what you are paying regardless of whether the rent is $1,800 or $2,400. No surprise leasing fees either.
The math is simple. On a $2,000 rental the percentage companies are taking $160 to $240. I take $125. Over a year that difference adds up to real money you keep in your pocket.
When it makes sense to hire help
If you have a full time job, live more than 30 minutes from your properties, or simply do not want to handle late night calls about broken furnaces, a manager pays for itself quickly. The time you get back is worth more than the fee for most people I work with.
Self managing works fine when you have one or two properties and enjoy the work. Once you hit five or six doors the calls and paperwork start eating into evenings and weekends.
What to watch for in any management contract
- Are repairs marked up? I do not mark them up.
- Is tenant placement extra? Mine is included.
- Can you cancel without a long notice period? I keep it month to month.
Read the contract line by line. The cheapest monthly fee can end up costing more if they nickel and dime you on everything else.
If you are a small investor in the West Metro wondering about property management costs, call me at 952-994-4451 or use the contact form on this site. I manage 13 doors myself and I keep it straightforward.