Management Fee Leakage

You’re looking at a deal, doing your ROI calculations, and everything seems to work out. Then, there’s one small line item that no one really digs into: Management Fees.

On paper, it’s 8% or 10%. Sounds reasonable, right? But in reality, it’s almost never just that. Suddenly, there are visit fees, contract renewal fees, markup on repairs, contractor fees, evictions, delays, “management of works,” etc.

Every little fee seems insignificant, but together, they chip away another 5% to 10% of your income—without you even noticing.

And it’s not just the money—it’s the incentive. A management company doesn’t always profit when you profit. Sometimes, they profit more when there’s more turnover, more repairs, more actions. More activity means more fees.

And you’re left with a cash flow that looks good on paper but gets eroded in reality month after month.

Then comes the moment when you ask yourself:
How is a “good” deal not making money?

It’s not the market, it’s not the interest rates, it’s not the tenant. It’s the leakage.

If you don’t know exactly how much you’re really paying for management, you don’t really know how much you’re actually making.