Operating expenses
Management Fee
Property management cost as % of collected rent. Typical PM fees: 8-10%. Set to 0 if you self-manage.
Why Management Fee matters
Always include 8-10% management in your underwrite even if you plan to self-manage. Why? Your time has cost. AND if you ever sell or hand off the property, the next owner will need PM in the model. A deal that only works at 0% management is a fragile deal.
How to check Management Fee before you rely on it
Get a written fee schedule from at least one local property manager, and read past the headline percentage. Ask about the leasing fee for a new tenant, the renewal fee, maintenance markups, the vacancy fee, and any minimum monthly charge, because those often add more than the base rate. Underwrite the deal with the full cost even if you plan to manage it yourself; if you later hire it out, sell, or move away, the property has to carry that expense.
Related terms
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Where Management Fee shows up in TrueCap
Operating expenses are line items in the analyzer's expense section, each labeled with its source — a HUD or FRED benchmark, a TrueCap default you can replace, or your own number. Property tax is always your local figure. Together they produce NOI and cash flow after reserves, and the results view shows how much each one moves the decision.