Renting out a property can be a great way to earn passive income, but it also comes with its fair share of responsibilities. From finding the right tenants to making sure everything runs smoothly day to day, it can quickly become a lot to handle. That’s where property management services come in. Whether you’re letting out a flat or a short-term holiday home, it helps to understand exactly what you’re paying for when you hire a professional.
This guide breaks down the most common types of property management fees so you can make informed choices and budget with confidence.
Related: Rent collection: DIY vs letting agents
What are property management fees?
Property management fees are the charges you pay an agent or management company to take care of your rental property. The services covered can vary, but they usually include things like marketing your property, screening tenants, collecting rent, organising repairs, and ensuring you stay legally compliant.
There are two typical ways these fees are charged:
- Percentage of the rent: Most commonly, agents charge a percentage of your monthly rental income. This tends to fall between 10% and 15%, depending on the service level and location.
- Flat monthly fee: Some agencies may offer a fixed rate, which can be helpful if you prefer consistent monthly expenses, especially if you’re managing multiple properties.
If you’re new to letting, percentage-based fees are more common for single-property landlords, while flat fees tend to suit landlords with larger portfolios who want to streamline costs.
Related: Landlord’s guide to tax returns
Types of property management services (and what they cost)
There are a few service levels to choose from, and you can often pick one that suits how involved – or hands-off – you want to be as a landlord.
Let-only service
Let-only (or tenant-find) services are perfect for landlords who want help finding tenants but are happy to handle the ongoing management themselves. The agent will usually market the property, conduct viewings, handle tenant referencing, and draw up the tenancy agreement.
You’ll typically pay a percentage of the first month’s rent for this one-off service. If you’re confident in managing repairs and rent collection but want help finding reliable tenants, this option could save you money.
Full management service
With full management, the agent looks after everything on your behalf. This includes finding tenants, managing rent payments, handling repairs, carrying out inspections, and dealing with any day-to-day queries from tenants.
This is a popular choice for landlords who live far from their rental property or simply don’t want the hassle. You would pay a percentage of the monthly rent, depending on the level of involvement and location.
It’s a good idea to ask what’s included in the fee, some agents cover basic maintenance, while others charge extra for anything beyond tenant communications.
Set-up or onboarding fees
This is a separate charge that covers the cost of getting your property ready to rent. It might include photography, floor plans, safety checks, and paperwork like tenancy agreements or deposit registrations.
Costs vary, but it’s worth budgeting for this upfront, as it ensures your property is listed professionally and legally compliant from the start.
Tenancy renewal fees
When tenants renew their lease after the initial term, many agents charge a smaller fee for updating the contract and keeping everything in line with regulations.
This fee usually sits between £50 and £150, and while it’s not huge, it’s something to bear in mind, especially if your tenants stay long term.
Maintenance and repair handling
Some agents include repair coordination in their standard service, while others might charge you a separate admin fee for every job. In many cases, if a repair exceeds a certain value, they’ll contact you for approval.
To avoid surprises, it’s best to clarify in advance whether you’ll be consulted for all repair decisions or just the big ones.
What is short-term property management?
Short-term property management is geared towards landlords who rent out holiday homes, serviced apartments, or Airbnb-style lets. These types of properties usually involve higher guest turnover, which means more frequent cleaning, check-ins, and ongoing communication.
Services typically include:
- Multi-platform listing and optimisation
- Guest vetting and booking management
- 24/7 guest support
- Cleaning and restocking between stays
- Dynamic pricing to maximise occupancy
Short-term property managers usually charge a higher percentage fee, typically a percentage of your gross rental income, because managing high turnover lets involves more time, coordination, and guest support. While the fee itself increases with earnings, the appeal lies in the potential for higher returns compared to traditional long-term lets.
If you’re exploring short-term letting, be sure to ask your agent how they manage occupancy and seasonal pricing – it can make a big difference to your earnings.
Related: What is a periodic tenancy
Property management vs building management fees
It’s easy to confuse property management fees with building management fees, but they’re quite different.
- Property management fees cover services provided by your letting or property manager, such as tenant management, rent collection, and repairs.
- Building management fees (also called service charges) are paid to the building’s management company and cover communal services like cleaning, maintenance, and lift repair.
If you own a leasehold property, particularly a flat, you’re likely to pay both types of fees, so always factor both into your budget.
What affects how much you pay?
Several factors influence the cost of managing your property:
- Location: Fees tend to be higher in areas like London and the South East due to higher property values and rental prices.
- Property type: Larger or more complex homes (like HMOs) can be more expensive to manage.
- Service level: More comprehensive packages with hands-on support will usually cost more.
- Let type: Short-term lets are usually more labour-intensive, hence the higher fees.
If you’re looking to keep costs down, talk to a few different agents about what’s included in their packages, you might find that a mid-tier option gives you the best value.
Get your questions answered
Whether you want full hands-off support or just a little help finding the right tenant, there’s a property management service out there to match. Understanding the fees involved helps you plan ahead, compare agents properly, and ultimately get the best return from your rental.
And remember, while the fees might seem like an added cost upfront, they can save you a lot of time and stress in the long run, especially when things don’t go as smoothly as expected.
Speak with your local Ellis & Co branch to understand options today.
