The Percentage-of-Rent Model is the most common pricing method used by property management companies. In this model, the company charges a fixed percentage of the total rent collected every month.
For residential properties, the fee usually ranges from 8% to 12%.
For commercial properties, the percentage is slightly lower, usually between 4% and 10%.
The exact fee depends on the location, the type of property, and the services included.
The calculation is very simple. If your property in Bengaluru earns Rs. 60,000 as monthly rent and the company charges 10%, you will pay Rs. 6,000 as the management fee for that month.
The company typically deducts this fee directly from the rent before transferring the remaining amount to you. Since the fee changes based on the rent collected, you only pay more when your rental income increases.
This model is very useful for NRIs who want hassle-free property management. Because the company’s earnings depend on the rent they collect, they naturally try to keep your property occupied. They work harder to find reliable tenants, reduce vacancy time, and negotiate better rent. Their success is directly linked to your rental income, so they have a strong reason to protect your interests.
This model works best when your property has steady rental income. If your property stays vacant for long periods, the lack of rent may reduce the company’s motivation and may also affect your earnings. However, for well-located properties with regular tenants, this model remains one of the most efficient and transparent options.
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Property management companies usually charge a monthly fee between 8% and 12% of the rent they collect. This fee covers their work in handling tenants, collecting rent, and taking care of basic issues. For example, if your monthly rent is Rs. 12,000 and the company charges 10%, you will pay Rs. 1,200 as the management fee. This amount gets deducted from the rent every month.
When your property is vacant, the charges may be different. Many companies ask for a fixed fee or a fee equal to one month’s rent. They do this because vacant homes require extra work. The team has to visit the property regularly, check for any damage, and ensure no trespassers or break-ins happen. This helps keep the property safe until a new tenant moves in.
So, if you want to know how to calculate property management fees, you can use this formula: Monthly Rent × (Percentage Fee ÷ 100).
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How to Calculate Property Management Fees?
Brunda212
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2025-11-24T22:29:10+00:00 2025-11-24T22:29:12+00:00Comment
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