How to Choose a Property Manager: Fees, Questions and Red Flags

Many of my clients own a rental because they moved, received military orders or bought an investment property. A good property manager can turn that rental into a mostly hands-off asset. A poor one can cost far more than the fee. Here’s how to choose well.

How property management fees work

Fee	What it covers	What to ask
Monthly management fee	Rent collection, tenant communication, routine coordination	Is it charged on rent due or rent collected?
Leasing or placement fee	Marketing, showings, screening, lease signing	Is there a guarantee if the tenant leaves early?
Renewal fee	Lease renewal and rent review	Is it a flat amount or a percentage?
Maintenance markup	Coordinating vendors	Do they add a markup to repair invoices?
Other fees	Inspections, eviction coordination, setup	Ask for a full written list

A worked example

Say your townhouse rents for $3,000 a month. Manager A charges 8% monthly plus a leasing fee of half a month’s rent. Manager B charges 10% monthly with no leasing fee.

Yearly cost	Manager A	Manager B
Monthly fees (12 months)	$2,880	$3,600
Leasing fee	$1,500	$0
Total in a year with a new tenant	$4,380	$3,600
Total in a renewal year	$2,880	$3,600

Manager A costs more in a year with a new tenant and less when the tenant renews. If they keep good tenants longer, the cheaper option on paper may not be the cheaper one in practice. These are example fees; get written quotes.

Questions to ask in the interview

1. Are you licensed in Virginia, and who will manage my property day to day?
2. How many homes does each manager handle?
3. How do you set rent and market the home?
4. What are your written screening criteria, and how do you follow fair housing law?
5. How do you handle repairs, and what’s my approval limit?
6. How fast do you respond to tenants and owners?
7. When and how do I receive rent and monthly statements?
8. How are security deposits held?
9. How can I end the agreement, and is there a fee?

Red flags

• Vague answers about fees or a refusal to put them in writing.
• No clear process for move-in and move-out inspections with photos.
• Promises of rent far above comparable homes.
• Pressure to sign a long agreement with large termination fees.
• Poor reviews from tenants, since unhappy tenants often leave sooner.

Read the management agreement

The agreement controls the relationship, so read it as closely as a lease. Look for the length of the term and how either side can end it, every fee in writing, the dollar limit for repairs the manager can approve without you, how reserves are held, and who owns the lease and tenant relationship if you part ways. Ask how disputes and evictions are handled and what they cost.

Finally, make sure your insurance fits a rental. You’ll need a landlord policy rather than a standard homeowners policy, and many managers ask to be listed on it. Ask your tenant to carry renters insurance as well.

Measuring performance

Once you hire a manager, track a few numbers each year: how long the home sat vacant between tenants, how much you spent on repairs, how quickly rent arrived and how often tenants renewed. Compare rent with similar homes nearby so you know you aren’t leaving money on the table. A short annual review call keeps everyone aligned. If the results slip and conversations don’t fix them, your agreement’s termination terms give you a way out, which is why it pays to negotiate those terms before you sign.

Frequently asked questions

Should I manage my rental myself?

If you live nearby, have time and know Virginia landlord-tenant law, maybe. If you’re moving away or busy, a manager is usually worth it.

How do I set the right rent?

Start with the Rental Price Estimator, then compare with similar homes for rent nearby.

What should I know about screening tenants?

Read Tenant Screening and Fair Housing and my Landlord’s Guide.