Self-Managing vs Property Manager: Real Cost Analysis Per Door

You're running numbers on a rental property and you've hit the property management line item. You type in 10% and watch your cash flow drop by $150/month. That's $1,800 a year. On a four-unit building, that's $7,200. You start thinking: I could just manage it myself.

This is where most investors make the decision emotionally rather than mathematically. Let's fix that.

What Property Managers Actually Charge

The [National Association of Residential Property Managers](https://www.narpm.org/) tracks industry fee structures. The typical range is 8-12% of collected rent for residential properties. But that percentage is just the starting point.

Common fee structures:

Fee Type	Typical Range	What It Covers
Monthly management	8-12% of rent	Day-to-day operations, rent collection, tenant communication
Leasing fee	50-100% of first month's rent	Advertising, showings, screening, lease execution
Renewal fee	$150-300	Lease renewal paperwork
Maintenance markup	10-20%	Coordination fee on repairs
Vacancy fee	$0-50/month	Some charge during vacancies

On a $1,500/month rental, a 10% management fee is $150/month. But if your tenant turns over annually, add another $1,500 for the leasing fee. A few maintenance calls with a 15% markup add another $200-400 over the year. Your actual cost is closer to $3,400, not $1,800.

That's 19% of gross rent, not 10%.

The Real Cost of Self-Managing

Self-managing isn't free. It costs time, and time has a value. The question is whether you're accounting for it honestly.

Time Requirements by Task

Here's what I've tracked across my own properties:

Monthly ongoing (per door):

Rent collection and bookkeeping: 15 minutes

Tenant communication: 30 minutes average (some months zero, some months two hours)

Maintenance coordination: 45 minutes average

Annual tasks (per door):

Lease renewals: 1-2 hours

Annual inspection: 2 hours including drive time

Tax prep and documentation: 3 hours

Turnover (when it happens):

Cleaning coordination: 2 hours

Repairs and make-ready: 4-8 hours of coordination

Marketing and showings: 8-15 hours

Screening and lease signing: 3 hours

For a single property with annual turnover, you're looking at 50-70 hours per year. With no turnover, it's more like 25-35 hours.

Putting a Dollar Value on Your Time

This is where people get uncomfortable. If you make $75/hour at your job, is your "landlording" time worth $75/hour? Maybe. Maybe not.

I think about it differently. What else would I do with those hours?

If the answer is "work overtime" or "take on consulting," then yes, use your professional rate. If the answer is "watch Netflix," your opportunity cost is lower.

But be honest. Those 10pm maintenance calls, the Saturday morning showing, the Tuesday afternoon court appearance for an eviction. That's not leisure time you're sacrificing.

> Cost of self-managing = Hours spent × Your honest hourly rate

At $50/hour and 50 hours/year, self-managing costs you $2,500. At $75/hour and 70 hours/year, it's $5,250.

A Worked Example: Four-Unit Building

Let's compare both options on a real deal.

Property details:

4-unit building

Each unit rents for $1,200/month

Gross rent: $57,600/year

Average turnover: 1 unit per year

Maintenance budget: $2,400/year (5% of gross)

Option A: Property Manager

Cost Item	Annual Amount
Monthly management (10%)	$5,760
Leasing fee (1 turnover at 75% of month)	$900
Maintenance markup (15% on $2,400)	$360
Total PM Cost	$7,020

Per-door cost: $1,755/year or $146/month

Option B: Self-Managing

Cost Item	Annual Amount
Time: 4 units × 8 hours/year ongoing	32 hours
Time: 1 turnover × 20 hours	20 hours
Time: Annual tasks × 4	16 hours
Total hours	68 hours
At $60/hour	$4,080

Per-door cost: $1,020/year or $85/month

The Difference

Self-managing saves $2,940/year on this building. That's $735 per door annually.

But here's what the math doesn't capture: the 11pm water heater call, the tenant who texts you during your kid's soccer game, the mental overhead of always being "on."

For some people, that $2,940 buys freedom. For others, $2,940 isn't enough to deal with the hassle.

When Self-Managing Makes Sense

You should probably self-manage if:

You have fewer than 4 doors. The time investment per door is roughly the same whether you have 1 unit or 4. The overhead of finding and managing a property manager relationship isn't worth it for small portfolios.

Properties are within 30 minutes of where you live or work. Drive time kills the economics of self-managing distant properties.

You have flexibility in your schedule. If you can take a call at 2pm on a Tuesday, self-managing is much easier than if you're in back-to-back meetings.

You're still learning. Managing your first few properties teaches you what to look for when you eventually hire a PM. You'll spot a bad property manager faster if you've done the job yourself.

Your tenants are stable. Long-term tenants with low turnover dramatically reduce the time burden.

When a Property Manager Makes Sense

You should probably hire a PM if:

You have 10+ doors. At scale, the time burden becomes a second job. Your hourly rate for landlording drops because you're spending 20+ hours per week on it.

Properties are more than an hour away. Driving to a property to meet a plumber eats your entire morning. At distance, you need boots on the ground.

Your W2 income is high. If you make $150/hour at your job, spending 50 hours per year on property management costs you $7,500 in opportunity cost. That's more than the PM fee.

You're scaling quickly. When you're acquiring multiple properties per year, your time is better spent on deal analysis than tenant calls.

You hate it. Some investors love landlording. Some hate it. If tenant calls stress you out, if you avoid dealing with maintenance, if you resent the intrusion on your life, pay someone else. The mental tax is real.

Common Mistakes in This Analysis

Mistake 1: Ignoring the Leasing Fee

Investors see "10% management fee" and think that's the whole cost. But the leasing fee on turnover is often 50-100% of one month's rent. With average tenant stays of 2-3 years, you're paying this fee regularly.

On a $1,400/month unit with turnover every 2 years, that leasing fee averages $700/year, adding another 4% to your effective management cost.

Mistake 2: Undervaluing Your Time at Zero

Free is not zero-cost. Your time has value. The investor who self-manages 10 properties is working a part-time job. If that time could generate income elsewhere (or simply preserve your sanity), it has a cost.

Mistake 3: Not Accounting for Mistakes

A good property manager knows local landlord-tenant law. They know what you can and can't put in a lease. They know how to properly document for an eviction.

Your first self-managed eviction might cost you an extra $2,000 in legal fees and lost rent because you served the wrong notice. That's a real cost that belongs in the analysis.

The Break-Even Formula

Here's how to find your personal break-even point:

> Break-even hourly rate = Annual PM cost ÷ Annual hours self-managing

Using the four-unit example:

$7,020 ÷ 68 hours = $103/hour

If your time is worth more than $103/hour, hire the PM. If it's worth less, self-manage.

For a single $1,500/month rental:

Annual PM cost: ~$3,400 (including leasing fee and markups)

Annual self-managing hours: ~50

Break-even: $68/hour

For many professionals, $68/hour is close to their effective W2 rate. The decision becomes less about math and more about preference.

What Most People Get Wrong

The biggest mistake isn't miscalculating the costs. It's treating this as a permanent decision.

I self-managed my first three properties. I learned how to screen tenants, handle maintenance calls, and run a turnover. When I hit seven units, I hired a property manager. The knowledge I gained from self-managing helped me evaluate PMs, catch their mistakes, and hold them accountable.

Then I fired that PM and self-managed again when I had more schedule flexibility. Now I'm back with a different PM as my portfolio has grown.

Your answer today doesn't have to be your answer forever.

Running Your Own Numbers

The math depends on your specific situation: your hourly rate, your property's rent, your tenant stability, and your distance from the property.

Before you default to 10% in your underwriting, run both scenarios. Calculate the true PM cost (including leasing fees and markups). Calculate the true self-managing cost (including your honest time value). Compare them.

The [single-family rental calculator](/tools/single-family) lets you model both scenarios. Run your deal with and without management fees, and see how it affects your cash-on-cash return. Sometimes the difference is $50/month. Sometimes it's $200. Know your number before you make the call.