What a management fee is
It pays for the ongoing work — collecting rent, handling tenants and repairs, and reporting to the owner — and shows up as its own line on every owner statement. Arizona, for example, requires a property management agreement to state the compensation the owner pays.
How it’s set
- A percentage of rent. The most common model. Check whether it’s a share of rent collected or rent scheduled, and what it applies to.
- A flat monthly fee. A fixed amount per home, whatever the rent — or a minimum under a percentage.
- Separate fees. Leasing or placement fees per tenant, setup fees, extension or renewal fees and maintenance markups sit outside the management fee — ask for all of them in writing.
Management fees on mid-term rentals
A midterm or medium-term rental takes more managing than a yearly lease — a lease, move-in and turnover every few months, furnishings and utilities to keep up — and fees usually reflect it. What Tyler Sorenson, Nexxus’s founder, has found works is about 15% for mid-term stays, down to 10% for furnished yearly leases: one operator’s experience, not a standard. The fee models, the questions to ask and the licensing rules are in mid-term rental property management.
In Nexxus, the fee is a company default you can set per owner’s property and override on a single booking — a lower rate on a year-long lease, say — and each owner’s payout takes it from the rent that actually came in. See mid-term rental software, or open the live demo set up for mid-term, no sign-up.
Related terms
- Owner statement — where the fee appears each month. See owner statement.
- Trust account — where a manager holds owners’ money. See trust account.
- Rental arbitrage — leasing a home to re-rent it, instead of managing it for a fee. See rental arbitrage.
Management fee FAQ
Is 15% a reasonable property management fee?
It depends on the work. Furnished mid-term rentals turn over every few months and take more management than a yearly lease, so their fees tend to run higher. Nexxus founder Tyler Sorenson has found that about 15% works for mid-term stays and 10% for furnished yearly leases — one operator’s experience, not a standard. Compare what you would net after every fee, not the percentage alone.
Is a management fee based on rent collected or rent scheduled?
Either, depending on the agreement — so read it. A fee on rent collected means the manager isn’t paid on rent a tenant never paid; a fee on scheduled rent is charged either way. Also check whether it applies to cleaning fees, deposits or utility charges.
Do property managers charge a fee when the home is vacant?
A percentage-of-collected-rent fee is usually zero in a vacant month, but some agreements set a minimum monthly fee or a vacancy fee. Ask what you pay in a month with no tenant.
Is a property management fee tax-deductible?
IRS Publication 527 lists management fees among the most common rental expenses. Ask your CPA how it applies to you — this is general information, not tax advice.
Sources
Read on the official sites on October 7, 2026. General information, not legal or tax advice.
- IRS: Publication 527, Residential Rental Property (rental expenses)
- Arizona Revised Statutes 32-2173 (property management agreements)