Watch Out! Hidden Property Management Fees That Could Kill Your ROI

Watch Out! Hidden Property Management Fees That Could Kill Your ROI

After managing hundreds of properties and coaching investors for over 20 years, I’ve seen it all. From excellent property managers who go the extra mile to protect your investment, to horror stories where landlords get buried in surprise fees. I’ve personally spoken to dozens of investors who felt trapped—some by outrageous cancellation fees, others by managers who constantly encouraged unnecessary repairs just to boost their own profits.

These hidden costs can destroy your returns and leave you stuck in a bad situation. That’s why I want to expose the real risks behind confusing property management fee structures—and how to avoid them.

In this guide, you’ll learn:

• What a normal PM fee structure should look like

• The hidden fees that quietly eat your profits

• What red flags to watch for in management contracts

• And why we believe in doing things differently at Aires Property Management

What Are Standard PM Fees?

Before we dive into the traps, let’s break down what’s actually considered standard across the industry. These are the typical, justifiable fees you’ll find in most property management agreements:

• Monthly Management Fee: Usually 8% to 12% of the rent collected.
  At Graystone Property Management, we keep it simple—we charge a flat 10% monthly fee for properties renting at $2,000 or more. That’s it. No leasing fee. No renewal fee. No hidden charges. Just clean, consistent pricing.

• Leasing Fee: Charged when placing a new tenant, typically 50% to 100% of one month’s rent.

• Lease Renewal Fee: Flat rate or percentage of rent when a lease is renewed (usually $100–$300).

• Maintenance Coordination Fee: 10% to 15% markup on vendor repairs, if outsourced.

• Setup/Onboarding Fee: One-time fee for account setup, generally $200–$500.

These are fairly common. But the horror stories investors share with me? They come from what happens next…

Hidden Fees You Need to Watch For

A lot of property management companies boast about low fees up front—only to sneak in a bunch of extras once the ink is dry. These charges show up monthly, quarterly, or during key transitions like tenant move-ins and repairs.

Here’s a breakdown of some of the most common (and most painful) hidden fees:

1. Vacancy Fee

Believe it or not, some PMs charge you even when your unit is sitting empty. This might be $50 to $150 per month—without doing much for it.

2. Bill Pay Fee

Paying your HOA dues or water bill? That’ll be $5 to $25 per payment just for them to click “submit.”

3. Inspection Fees

Quarterly inspections sound good until you see a $100 charge per visit. Suddenly that peace of mind starts eating into your profit.

4. Tenant Communication Fee

You read that right. Some companies charge $10 to $50 just to respond to tenant messages.

5. Technology or Admin Fee

Many firms charge $5 to $25 per month just to use their owner portal. That’s like charging you rent to use your own dashboard.

6. Advertising Fee

Even if you’re paying a leasing fee, they might tack on an extra $50 to $300 for listing the property.

7. Move-In/Move-Out Coordination

Handling keys, cleaners, and paperwork? That’s another $50 to $300.

8. Key Copy Fee

A $75 invoice to duplicate a key? That’s robbery. You could do it at a kiosk for $5.

9. Reserve Fund Requirement (This is a good think) 

They’ll hold back $250 to $500 of your rent as a “reserve,” just in case they need it. You won’t earn interest on it, and good luck getting it back quickly.

10. HOA Liaison Fee

Got an HOA? They might charge $20 to $100 a month just for reading your community’s emails.

11. Court Appearance Fee

If your PM has to go to court for an eviction or dispute, some charge $75 to $200 per hour. That adds up fast.

12. ACH/Bank Fee

You may get hit with a $2 to $10 fee every time they send you rent electronically.

13. Cancellation Fee

Here’s the worst one. I’ve heard stories of PMs who trap owners with cancellation fees equal to one month’s rent or more. That means even if the service is terrible, you’re stuck—or paying big to walk away.

14. Rekeying Fee

Expect $75 to $200 per turnover. Even if you already have a preferred locksmith, they may still require using theirs.

15. Emergency After-Hours Fee

If a tenant calls in a 2 AM emergency, your manager might charge $100 to $150 just to make a call to the plumber.

16. Optional Service Fees

Pest control, landscaping, HVAC checkups—you might be enrolled without realizing it, and billed monthly.

17. Home Warranty Surcharge

If you’ve got a home warranty and they don’t like dealing with it? Boom, $25 to $100 extra for their trouble.

18. In-House Maintenance Markup

This one’s sneaky. If the PM owns the maintenance company, they may mark up every job 10% to 25%—turning repairs into profit centers.

Real-Life Example: The Snowball Effect

Let’s break it down with a real-world case. Say your rental brings in $2,000/month. Here’s what your costs could look like with a fee-happy PM:

• Management fee (10%): $2,400/year

• Leasing fee: $2,000

• Renewal fee: $300

• Move-in/move-out: $400

• Two inspections: $200

• Tech/admin: $240

• Maintenance markup: $600

• Misc. fees (ACH, key, emergency): $300

Total: $6,440 in one year—more than 25% of your gross income.

And that doesn’t include repairs, vacancies, or potential legal issues.

What a Transparent PM Agreement Should Look Like

Good property managers don’t need to hide fees. Here’s what a straightforward, investor-friendly PM contract should include:

• Flat management fee that covers all basic services

• No surprise charges for communication or basic maintenance oversight

• Clear explanation of leasing/renewal fees, if any

• No markups on vendor costs—just pass-through billing

• Easy-out clause without penalties if things don’t work out

At the end of the day, you want a partner who protects your ROI—not one that bleeds you dry with junk fees.

Why Aires Property Management is Different

We created Aires because we were tired of the games. As investors ourselves, we saw too many friends and clients get burned by complicated contracts, overbilling, and hidden terms. So we built a system that puts landlords first:

✅ Just one monthly fee: 10% of rent (only applies to properties renting for $2,000 or more)
✅ No leasing fees
✅ No renewal fees
✅ No admin, portal, or communication charges
✅ No maintenance markup—we don’t profit from your problems

This model has helped us grow because our clients trust us. We’d rather earn 10% for 10 years than lose you with shady charges.

Before You Sign a PM Contract…

Ask to see:

• A full fee schedule—line by line

• A sample invoice and owner statement

• Maintenance policies, especially on markups

• Terms for termination or switching managers

If the answers are vague or the rep dodges your questions, move on. A great manager will be proud to walk you through every charge—and even prouder to tell you what they don’t charge.

Words from the COO
At Graystone, we believe that great property management isn’t just about collecting rent or handling maintenance calls. It’s about creating a system that works for everyone—landlords and tenants alike.

For me, it always comes down to one thing: transparency. I’ve seen too many investors stuck in one-sided contracts loaded with hidden fees, pressured into unnecessary repairs, or left in the dark when things go sideways. And on the other end, I’ve seen tenants feel like they’re just a rent check, not real people. That kind of imbalance creates tension and turnover—and that’s bad business.

That’s why at Graystone, we’ve built a model that’s equitable. We treat every tenant with the same level of respect as we treat every landlord. We communicate clearly, process requests with care, and manage properties like they’re our own. No junk fees. No surprise charges. Just good vibes, mutual respect, and a commitment to long-term success—for everyone involved.

“When you treat landlords and tenants with equal respect, everyone wins. That’s how we’ve built Graystone—and it’s how you build lasting success.”
Ready to connect and strategize? Contact me at graystoneig.com/jay – Jay Michalec, COO of Graystone Investment Group.

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Jay Michalec – COO & Property Management Expert at Graystone.

With 25+ years in hospitality and a background as a U.S. Army vet, Jay brings discipline and care to every rental. He’s the guy behind smooth operations and happy landlords. Connect with Jay: https://graystoneig.com/jay

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