How much does administrative management cost you each year?

It varies widely by market, property type, size, and what the agreement includes, so treat any published range as a starting point and get local quotes. Management fees are most often a percentage of collections, commonly in the low-to-mid single digits for small retail, office, and industrial properties. Smaller or more hands-on properties, such as a multi-tenant strip center with frequent turnover, tend to sit at the higher end, while a single-tenant net-leased building with little day-to-day work tends to sit lower. Some managers quote a flat monthly fee instead.

Read the compensation section of the agreement closely. Many agreements charge on gross receipts actually collected, so the manager isn't paid on rent that never comes in. Others charge on scheduled or billed rent, which costs you more when tenants are behind. Agreements also differ on whether CAM, tax, and insurance reimbursements, late fees, and other income count toward the base; security deposits are normally left out. This calculator applies the fee to the base rent plus any recoveries you enter, so leave recoveries blank if your agreement charges on base rent only.

Common extras include leasing commissions on new leases and renewals (often a percentage of the lease's total rent, sometimes split with an outside broker), a setup or onboarding fee, a construction-management fee on capital projects (usually a percentage of project cost), charges or markups on maintenance and after-hours calls, and fees for preparing year-end CAM reconciliations. None of these are included here, and over a year with leasing activity they can add up to more than the base fee.

Many managers set a minimum dollar amount per property per month so a small building is worth taking on. When the property's collections are low, that minimum can be more than the percentage would produce. This calculator applies only the percentage. If your quote has a minimum, compare the yearly fee shown here with 12 times the minimum and use whichever is higher.

Often, at least in part. Many net leases let the landlord include a management or administrative fee in CAM, frequently limited to a stated percentage of CAM costs or of the property's gross revenue. Whether you can still charge it when you manage the property yourself depends on the lease wording, so check it before you count on that recovery. Tenants are allowed to question these fees in an audit, so keep the calculation behind them.

Start with the fee shown here, then subtract what you'd still pay for: software, a bookkeeper or accountant, a leasing broker when a space comes open, maintenance vendors, and emergency coverage. Then put a value on your own hours. If the property takes 10 hours a month to administer and your time is worth $100 an hour, that's $12,000 a year to set against the fee. Self-managing tends to make the most sense when the administrative work is predictable and you can line up reliable vendors for the field work.

Usually, yes. Appraisers, lenders, and buyers typically deduct a market-rate management fee when they calculate net operating income, often around 3% to 5% of effective gross income for small commercial properties, because the next owner may not manage it themselves. Self-managing still saves you the cash, but don't expect it to raise the property's underwritten value. Run your NOI both ways so you know both numbers.

It compares the recurring percentage fee with a monthly software cost, nothing more. It doesn't model leasing commissions, maintenance and repairs, emergency response, legal work, tax and accounting, construction supervision, minimum or flat fees, tiered rates, or the value of your time. It's a way to size the administrative part of the fee, not a quote or a recommendation to drop your manager.