What Are Typical Commercial Property Management Fees?

If you have a commercial property, hiring a property management service is a wise decision. As an investor, you may not have adequate time to maintain and manage all your commercial properties. By using the services of a property management company, you’ll give someone else the tasks of maintaining the right property condition and managing your tenants. However, as useful these services are, there are some people who are often hesitant because of the costs involved. There are several fees that you may incur for one reason or another. Let’s look at these fees so that you’re informed before hiring this service.

Management Fees

A property management company keeps your property leased with tenants, and this is what makes property ownership either unprofitable or profitable. The management fee may be a percentage of the gross monthly rent or it can be a flat fee (even though they’re uncommon). This fee pays for your property’s public face and keeps it full and profitable.

These fees are calculated according to the current condition and location of your property, the number of units in your property, the services involved in the management fee, and the market rates.

Advertising Fees

According to the commercial property management contract, the advertising costs can be made by the property manager, by the property owner or split between the two parties.


If the agreement states that the owner is responsible for these costs, then he/she can arrange on how to meet these costs. If the fee is to be split between the two, then you can together to generate money for the expenses required.

Leasing and Set-Up Fees

A set-up fee is a one-time fee charged by the management company to compensate for the resources and time needed to set up your portfolio. It covers the transfer of property information from you as the owner or from a previous manager.

It also covers the first inspection of your property to know if there are improvements and repairs needed. A leasing fee is charged for the time and effort by the manager to find you tenants.

Some property managers include it in the management fees while others offer it as a stand-alone service. Therefore, it’s vital that you’re clear with your manager on that.

Lease Renewal Fee

This is a fee that you’ll incur each time the property manager renews a lease for a current tenant. It covers the costs involving in drawing up paperwork (it involves some legal aspects) and any communication is getting the documents signed.

Maintenance Fees

These are costs involved in the upkeep of your property. While the management team takes care of the leasing aspects, regular maintenance is also very important to reduce the risks of losses due to property damage.


Some management companies have their own crew responsible for handling these maintenance tasks while others hire outsiders. Make sure that the fees involved are negotiated in an agreement. Maintenance fees cover exterior and interior repairs, cleaning and minor improvements.

Other Fees:

The above are not the only fees you may incur; there are additional fees such as late payment fee, eviction fees, property sale commission, bill payments fee, lease violation fees, reserve fund fees, unpaid invoice fees, and other unspecified fees.

Ask for a comprehensive fee schedule before signing with a management company, and ask plenty of questions to avoid any surprises and get details in writing.

These are the typical fees involved in the management of your commercial property and they’ll depend on your company of choice. Therefore, be sure to discuss thoroughly the costs involved so that you can make an excellent overall decision.