How Profitable is Property Management: Is it Worth It?

by Patrick Freeze  1/31/2023

Finding a good property management team can alleviate the headaches and stressors of running a rental business. After all, property managers handle all aspects of running your investment instead of taking on all the responsibilities yourself. But how profitable is property management, and is it worth it for your business? First, let’s go over the benefits of outsourcing property management tasks.


Contents of This Article:

  • What Is Property Management?
  • How Profitable Is Property Management for Landlords?
  • What to Look For in a Property Management Team
  • Typical Property Management Fees
  • Find a Reliable Management Team Today

What Is Property Management?

Before determining how profitable property management is, it’s essential to understand what it entails. If you own rental properties, you have a ton of responsibilities, including property maintenance, tenant relations, legal obligations, and more. However, when you hire a property manager, they take care of all your rental needs. 

For instance, property management in Northern Virginia covers all the day-to-day operations, including: 


  • Rental Marketing
  • Tenant Screening
  • Rent Collection
  • Rental Repairs and Maintenance
  • Property Inspections
  • Move-In/ Move-Out Reports
  • Legal Eviction Procedures
  • Business Accounting

As you can see, property managers take on nearly all the responsibilities of a rental business, putting less stress on landlords. But it’s important to know how it may affect your business and profitability. So, how profitable is property management? Read along as we discuss below. 

How Profitable Is Property Management for Landlords?

Finding a good property management team will take time and cost money. However, the costs are worth it for busy landlords that want to grow their businesses. While initially, property management fees may take some of your profits, a good company can significantly improve your bottom line. 

Professional managers take the stress away from property owners who don’t have time to maintain more than one rental. After all, it’s hard to successfully grow your business if you don’t have time to find tenants, perform maintenance, and keep up with each rental. As such, having dedicated professionals to do these tasks for you can free up more time to expand your rental portfolio. 

Property managers market properties to lower vacancy rates, keeping more tenants in your rentals and more money in your pocket. Additionally, property management companies remain profitable by: 

  • Tracking Rental Income
  • Business Accounting and Billing
  • Ensuring Consistent Rental Revenue
  • Marketing Rentals and Reducing Vacancies

Remember that not every landlord needs to outsource tasks to a property manager. Generally, a comprehensive management team is great for landlords with several rental properties. However, if you think professional management will benefit your business, here’s what to look for. 

What to Look For in a Property Management Team

If you’re looking for a property management team to boost profits and your reputation as a rental company, you’ll want to have some prerequisites and expectations in mind. Here are some main qualities to look for in a property management company. 


  1. Local Expertise
  2. Licenses and Certifications
  3. Reviews and References
  4. Terms and Fees
  5. Organization and Technology

Local Expertise

Effective property managers understand the local market exceptionally well. As such, you’ll want to find a management team well-versed in the local competition and pricing standards. However, it goes beyond that. An excellent local management team knows all the applicable laws and licensing requirements per jurisdiction. 

Additionally, your management company should know the rental market demographics and have solid vendor relationships. After all, you’ll want to efficiently market your rentals for maximum exposure and ensure they get the necessary maintenance.

Licenses and Certifications

Most states require property management companies to have a management or real estate broker’s license. So if you’re looking at local companies to manage your rentals, ensure they’re qualified and licensed. 

Licensed managers go through approved property management courses and pass a state licensing exam. In turn, they have extensive knowledge in the field to help owners navigate their business needs. 

Reviews and References

It’s important to find a company with good reviews and a solid reputation in the industry. As such, you’ll want to look at company reviews and testimonials or get a referral from another investor. 


After all, if a management company has a bad reputation, an investor likely won’t recommend them to you. However, successful companies will remain on top and show their accomplishments through positive reviews from tenants, vendors, and other professionals. 

Terms and Fees

Another critical aspect to pay attention to when hiring property management is their terms and fees. Most management companies have monthly management fees and other costs, depending on their services. 

You’ll want to determine all the services a company offers and decide which ones you’re willing to pay for. For instance, many management companies provide comprehensive management services for a percentage of your monthly rental income. 

Organization and Technology

Managing rentals requires a ton of organization, whether record keeping or documenting communication with tenants. As such, the property manager you hire should have advanced processes and technology to handle various administrative demands. 

Great property managers are highly organized, keeping records with as little paper as possible. Electronic systems and software are more secure and accurate than physical documentation. As such, a management company that’s up-to-date on technology can benefit rental owners. 

Typical Property Management Fees

When deciding on a property management company, fees are a significant factor to consider. Therefore, it’s important to ask plenty of questions to fully understand what you’re paying for initially and what additional costs may come up. 

Keep in mind that several factors may affect your rates and fees. For instance, the location, type, and condition of your rentals may influence how much you’re charged for management fees. Additionally, the extent of services you need can affect how much you’re charged. 


Let’s go over some of the typical monthly management fees and additional fees paid to vendors or other parties involved in your rental. 

Monthly Management Fees

  • Start-up Fee- Most companies charge start-up fees, generally ranging from $100 to a few hundred dollars. 
  • Monthly Management Fee- Rental owners can expect to pay around 8% to 12% of their monthly rental income toward management fees.
  • Leasing Fee- Many companies charge leasing fees to cover advertising costs and leasing agent commissions.
  • Renewal Fee- Renewal fees cover administrative tasks such as processing renewals, market research, tenant negotiations, and lease preparation. 
  • Inspection Fee- Companies generally charge fees to send inspectors out for move-out or periodic inspections.
  • Early Termination Fee- If you break your contract with a management team early, you could be charged early termination fees. 

Other Management Fees

  • Eviction Fees- Rental owners may need to pay for processing a tenant eviction, as it’s an expensive and tedious process.
  • Court Costs- Property owners sometimes have to pay for attorneys or court appearances, which may be an hourly charge or a flat rate fee. 
  • Compliance Fees- Depending on your local requirements, you’ll need to pay for rental license inspections or housing certifications. 
  • Maintenance Costs- While property managers facilitate repairs, rental owners need to pay for them, whether they pay the vendor directly or the management company. 

Find a Reliable Management Team Today

How profitable is property management? It depends on several factors. However, many landlords find property management helpful and necessary for large real estate investment portfolios. If you’re looking for a reliable property management team, look no further than Professional Property Management in Northern Virginia. 

PPM provides comprehensive services to help maximize your rental ROI, lower business expenses, attract and retain great tenants, and relieve the stress of being a landlord. So, contact PPM to learn more about our services and find a reliable Northern Virginia property manager today. 

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