Better Basics: Everything You Need to Know About Property Management Fees

When you decide that it’s time to hire someone to manage your property, you’ll quickly discover that there are fees and intricacies that you should be aware of before making a final decision. From property taxes to maintenance bills, property management companies in Toronto can take care of these things for you so you don’t have to worry about managing them yourself – which can be a huge pain.

The best way to prepare for handling these management fees is to gain a comprehensive knowledge of what fees may be applicable to your properties and how they are calculated. Below, we’ve put together a short guide to understanding both residential and commercial property management fees.

what is included in property management fee

Residential Property Management Cost

Residential property management contracts can be paid to a management company for helping you to maintain and upkeep single-family homes, duplexes, condominiums, townhouses, and other residential properties once you have a tenant settled in them.

By paying residential property management fees to ensure that repairs are done in a timely manner and the properties are generally held in good repair, you are paying to protect your investments. A well-kept house makes you more money, and property management firms will ensure you see that return.

What is typically included in fees for property management?

Every company is different, but a company like Buttonwood includes the following services for residential properties:

  • Rent collection
  • Cash flow management
  • Repair coordination and payment
  • Payment of property tax, maintenance, condo fees, and other specific fees
  • Keeping communication with tenants and resolving disputes
  • On-call services for tenants
  • Reports before and after each tenant vacate a property
  • Bookkeeping

When you pay a fee to a property management company, you work out the details about what specific aspects of management they will handle. If you only want them to handle certain areas, you can work that out by discussing the details. After all, every property is different, so you can find the perfect balance for the services that you need.

What is the average management fee for rental property & how is it calculated by management firms?

The average cost of property management services for residential properties is between 8 and 12% of the property’s rental cost. While there are some companies that charge a flat rate for their baseline price, it is more common to charge a  percentage based on rent prices.

Here at Buttonwood, we are competitive with our rates and offer an easy to understand the fee structure.

Beyond that base price, every property management firm will have specific fees that will be added depending on what services you request. Such fees may occur at the following times:

  • Vacant property: you may pay a fee or month of rent to have them help you find and place a tenant.
  • Maintenance: you will work out a specific guideline for what maintenance they will cover and what they will not. Your fee might include them doing specific work, and then you will have to cover part or all of any work that falls outside of the initial work scope.
  • Eviction: you will have to pay a flat rate fee, determined by the company, to cover the time and cost of evicting a tenant.

As mentioned, the amount that you will pay is very specific to your personal arrangement. Every management company is different, and your needs are specialized. Together, you will come up with a financial arrangement.

Commercial Property Management Cost

Residential properties aren’t the only ones that need to be maintained. Some commercial property owners turn to property management firms to help organize them and keep the properties in good repair. While similar to the residential process for property management, there are a few key differences.

What is typically included in the property management cost for a commercial property?

To compare with the residential property management process, we’ll once again highlight what we cover in our commercial property management at Buttonwood.

  • Finding the right tenants for commercial properties and setting up leases with them
  • Collecting rent and any necessary fees from tenants
  • Acting as a landlord to be accessible to tenants 24/7
  • Setting up leases and ensuring they are accurately followed
  • Managing cost of properties and payments for local taxes, maintenance repairs, and more
  • Bookkeeping and releasing monthly reports
  • Inspection

In addition to these baseline services, the best property management firms will also help you do a risk assessment and sustainability reports to ensure the future success of your commercial property is viable.

property management fee structure

What is the average management fee for commercial properties and how is it calculated?

Similar to residential property management, the base idea that the cost will differ depending on the specifics of your contract with a management firm remains. Still, average costs for commercial property management can be compared to give you an idea of what to expect.

The price for commercial property management is usually equal to between 4 and 12% of the property’s rent as a base cost. Depending on the number of properties in your management portfolio and the exact services that you need, this number may change.

Like residential property management, there are fees for finding new tenants, renovating a space, evicting tenants, and other specific situations that your management company will charge you for. Before you begin to work with any management firm, it is important to work out the detailed costs so that you are not caught unaware by a management fee.

Some costs specific to commercial properties that you may want to consider asking about include:

  • Snow removal/maintenance of public parking spaces
  • Commercial taxes in the area
  • Renovation costs & contracting fees
  • Property wide budgeting if there are multiple commercial units in one space
  • Equipment for maintenance (do they already have it, will it need to be rented or purchased, etc.)


Now that you’ve gained a better idea of what goes into property management fees for both residential and commercial properties, working with any management company to keep your properties in order will be easier. With the knowledge of what the company will be handling, you can find the best value.

Our company is one that works on both residential and commercial properties, so if you are looking for a good management team, consider the comprehensive services that we offer. We are sure that you’ll find us a cut above the rest!

Sabine Ghali
Sabine Ghali
Helping real estate investors build wealth over time

Sabine Ghali, Managing Director at Buttonwood Property Management, Award Winning Real Estate Broker and an Entrepreneur at heart. Sabine is on a mission to help investors create real estate wealth over time in the Greater Toronto Area. Sabine is published in a number of media outlets, including Toronto Star, The Globe and Mail, Toronto Sun, Entrepreneur, Forbes, and Gulf News, among many others.