Choose a property manager the way you would hire anyone who will handle your money and your tenants: verify credentials, compare total cost rather than the headline fee, ask pointed questions about emergencies and screening, and read the management agreement before you sign. A good manager protects your cash flow and your time. A poor one can cost you months of rent and a damaged property. This guide walks through each step, with examples from Metro Detroit, where landlords in Wayne, Oakland and Macomb counties face older housing stock, a mix of neighborhoods and, often, Section 8 tenants.
TL;DR
- Confirm the manager is properly licensed and insured before you talk price. Ask for the license number and look it up with your state.
- Management fees generally run 5% to 10% of a month’s rent, but the extras (leasing, renewal, markup and vacancy fees) decide what you really pay.
- Interview at least three companies. Ask about screening, after-hours repairs, occupancy rates, fair housing compliance and reporting.
- Read the agreement for repair approval limits, security-deposit handling, monthly statements and how you can exit.
- Walk away from vague fee answers, slow replies and any manager who will not put promises in writing.
Table of Contents
- What a property manager actually does
- Decide what you need before you shop
- Check licensing, insurance and reputation first
- Compare fees by total cost, not the headline number
- Questions to ask in the interview
- Read the management agreement before you sign
- Look beyond the paperwork: property care and security
- Red flags that suggest a poor fit
- Our perspective: what we see in Metro Detroit
- Where to start your shortlist in Metro Detroit
- FAQ
- Sources
What a property manager actually does
A property manager runs the day-to-day of a rental. According to Realtor.com, that covers pricing and marketing the unit, screening tenants, collecting rent, handling emergency repairs, keeping up with legal changes, producing financial reports and tax documents, and carrying out inspections. It also includes making sure the property stays in line with fair housing and landlord-tenant law.
That list matters because it is your checklist. If a company cannot explain how it handles each item, you are buying a rent-collection service, not management. Decide first which of these jobs you want off your plate. An owner who lives 40 minutes away and has three rentals needs something different from an out-of-state investor with a duplex in Detroit.
Decide what you need before you shop
Before you call anyone, write down four things:
- Your property type. Single-family home, small multifamily, or a larger building. Many companies specialize, and the fit affects both price and quality.
- Your tenant profile. Market-rate renters, or voucher holders. If you rent to Section 8 tenants, you need a manager who knows the inspection and paperwork process. Our Section 8 management guide for Detroit landlords explains what to expect.
- Your involvement. Do you want to approve every repair, or only those over a set dollar amount?
- Your goals. Maximum monthly income, long-term appreciation, or low stress. A manager who pushes for the highest possible rent may suit the first goal and clash with the third.
With that in hand, you can compare companies on your terms instead of theirs.
Check licensing, insurance and reputation first
This step filters out the bulk of the risk, so do it before you sit through any sales pitch.
Licensing. Rules differ by state. California’s Department of Real Estate, for example, tells landlords to check that a manager’s license is valid and active, with the exception of resident managers, and to look into complaints and any professional affiliations or certifications. Michigan treats leasing and renting property for others as a regulated activity too, so ask any Metro Detroit company for the license number of its managing broker and confirm it on the state’s licensing lookup rather than taking a website badge on trust.
Insurance and bonding. The same California guide advises asking what insurance or bond the company carries and checking whether your own policy covers fraud by a property manager. Because a manager may hold your rent and security deposits in a trust account, this is not a formality. Ask for proof of coverage, and ask your own insurance agent what your policy does and does not cover.
Reviews and complaints. Read reviews from both tenants and owners. Owners tell you about accounting and communication. Tenants tell you how repairs and move-outs go, and that determines how long your tenants stay. Look for patterns, not single angry posts. Three reviews that mention the same unreturned phone calls are a pattern.
Compare fees by total cost, not the headline number
The monthly management fee is the part everyone advertises. Management fees generally range from 5% to 10% of a month’s rent, and some managers discount for multiple units. A percentage-based fee has an advantage: the manager earns more when your unit is occupied and paying. A flat fee can look cheaper on low-rent properties but may leave less incentive to fill vacancies fast.
Then ask about everything else. Request a written fee schedule that covers:
- Leasing or tenant-placement fee, often a portion of one month’s rent.
- Lease renewal fee each time a tenant stays.
- Maintenance markup or coordination fee on vendor invoices.
- Vacancy charges, inspection fees, eviction-handling fees and late-fee splits.
- Setup or onboarding fee and any charge to end the contract.
A worked example makes the difference clear. Say your rent is $1,400. At 8%, the base fee is $112 a month, or $1,344 a year. Add a leasing fee equal to half a month’s rent ($700) and a $150 renewal fee, and your first-year cost is $2,194 before any maintenance markup. A competitor charging 10% with no leasing or renewal fee would cost $1,680 for the same year. The cheaper-looking quote is not always cheaper. Our breakdown of what 8% versus a flat $250 fee actually covers goes deeper on how to line up two very different quotes.
Put the quotes side by side in a simple table like this:
| Cost item | Company A | Company B | Company C |
|---|---|---|---|
| Monthly fee (% or flat) | |||
| Leasing fee | |||
| Renewal fee | |||
| Maintenance markup | |||
| Contract exit fee | |||
| Estimated first-year total |
Fill in every cell. A blank means you have not asked the right question yet.
Questions to ask in the interview
Talk to at least three companies, and treat the call as a job interview. BigPockets’ list of questions covers experience, tenant screening, maintenance emergencies, vacancy rates, fair housing compliance, communication and financial reports. Here is how to turn that into a short, usable script.
Experience and fit
How many units do you manage, and how many are like mine? How long have you worked in my part of Metro Detroit? A company with 300 doors in Troy may not understand a two-flat in Hamtramck. Ask how many units each property manager personally handles. A very large load per person usually means slow replies.
Screening and fair housing
Ask for the written screening criteria: income-to-rent ratio, credit thresholds, rental history and employment checks. A manager should apply the same standards to every applicant. Consistent criteria also protect you, because the landlord shares responsibility for fair housing compliance. If the answer is “we go with our gut,” keep looking.
Maintenance and emergencies
Find out how after-hours repair requests are handled and whether the company uses in-house staff or third-party contractors. Confirm that before signing, not after the first burst pipe. In Michigan, a frozen-pipe call at 2 a.m. in January is not hypothetical. Also ask whether the company has an ownership interest in any vendor it sends work to. The Ohio Department of Commerce’s landlord guide specifically suggests checking whether the manager discloses ownership interests in repair or maintenance companies. That is a good standard to apply anywhere.
Performance numbers
Ask for the current occupancy rate and the average days a unit sits vacant. Managers should be able to give you their occupancy rate. Ask for references from two current owners with properties similar to yours, and call them.
Communication
One expert quoted by Realtor.com recommends a manager who responds within 24 hours. Test it yourself. Notice how quickly the company answers while it is still trying to win your business. It will not get faster after you sign. Ask which channel they use (portal, email, phone) and how often you receive updates.
Read the management agreement before you sign
The contract matters as much as the person you talk to. The Ohio Department of Commerce advises owners to get a copy of the signed agreement and confirm the fees, the repair approval and payment procedures, monthly accounting reports, security-deposit handling and how the agreement ends. Ohio law is not Michigan law, but those are the right questions anywhere. Here is what to look for:
- Term and cancellation. How long is the initial term? Can you cancel with 30 days’ notice, and is there a termination fee? Watch for auto-renewal clauses that lock you in for another year if you miss a narrow window.
- Repair authority. The agreement should say how repairs are approved and paid. Set a dollar threshold above which the manager must call you, with an exception for true emergencies.
- Inspections. Most managers do regular inspections, and the agreement should say so, including how often they happen.
- Money handling. Where is rent held, how fast does it reach you, and when do you receive statements? Monthly reports with itemized income and expenses are the standard to ask for.
- Security deposits. Who holds them, in what kind of account, and who handles the return and any dispute?
- Ownership of records. Make sure you can get your leases, tenant files and financial records if you leave.
If anything is unclear, ask a real estate attorney to review it. An hour of legal time costs far less than a year in a bad contract.
Look beyond the paperwork: property care and security
A manager’s quality shows up in how your property looks and how safe it is. Ask how the company handles exterior upkeep like lawn care, snow removal and seasonal cleanup, since neglected exteriors drive away good tenants and invite code violations. A maintenance checklist for common-area landscaping is a handy model for the kind of recurring tasks a competent manager should be scheduling and documenting.
Security is the other piece. Ask what the manager does about locks between tenants, lighting, cameras and package theft, and who pays. A guide to security practices for property managers lists the measures worth discussing so you can see whether a candidate has thought about them.
Red flags that suggest a poor fit
Spotting these early saves you from a messy exit later:
- Vague fee answers. If a company cannot explain in writing what you will pay for renewals, markups and exits, expect surprises on your statement.
- Fuzzy screening standards. No clear criteria means inconsistent decisions and possible fair housing exposure.
- Slow or evasive communication during the sales process.
- No proof of license, insurance or bonding, or reluctance to share it.
- Refusing to provide references or occupancy data.
- Pressure to sign today, or a contract that makes leaving expensive.
- Undisclosed ties to vendors who get most of the repair work.
- No clear emergency process. If nobody can tell you who answers at 11 p.m., nobody does.
One red flag may have an innocent explanation. Three should end the conversation.
Our perspective: what we see in Metro Detroit
We rank service providers for homeowners across Wayne, Oakland and Macomb counties, and landlords tell us the same story again and again. The problem is rarely the headline percentage. It is the surprise: a markup nobody mentioned, a repair approved without a call, a statement that arrives late. So when we research companies, we weigh customer sentiment about communication and billing at least as heavily as price.
Our advice is simple. Choose the manager whose answers are specific, written down and easy to verify. Local knowledge matters too: a company that understands Detroit’s older housing stock, city rental registration and Section 8 inspections will make fewer costly mistakes than a generalist. And because we do not accept payment for ranking placement, you can read our comparisons knowing no company bought its position. Start with a shortlist of three, run the same interview with each, and compare in writing.
— Bryan
Where to start your shortlist in Metro Detroit
If you own a rental in the Detroit area and want a vetted starting point, see our ranking of the 10 best property management companies in Metro Detroit. It compares local companies using independent research and customer sentiment, and it is updated quarterly. Use it to build your list of three, then run them through the interview questions above. If you are also weighing whether to sell the rental instead, our cash home buyer rankings for Metro Detroit cover that route.
FAQ
How much does a property manager cost?
Fees generally run 5% to 10% of a month’s rent, and some companies discount for several units. Many also charge leasing, renewal or maintenance fees on top. Compare the estimated first-year total rather than the monthly percentage.
What should a property manager handle for me?
A full-service manager markets the unit, screens tenants, collects rent, coordinates repairs, performs inspections and provides financial reports. They should also keep you in line with fair housing and landlord-tenant rules. Put the exact list of services in your agreement.
How many companies should I interview?
Three is a good minimum. It gives you enough quotes to spot an outlier on price or service without turning the search into a project. Ask every company the same questions so the answers compare cleanly.
Can I cancel a management agreement early?
Only if the contract allows it. Check the term, the notice period, any termination fee and whether it renews automatically. Negotiate a 30-day exit clause before you sign if you can.
Sources
- What Does a Property Manager Do? (Realtor.com)
- 78 Questions to Ask a Property Manager (BiggerPockets)
- Landlord’s Property Management Guide (Ohio Department of Commerce)
- Quick guide for landlords hiring a property manager (California DRE)