A Denver landlord hired a property management company at 7% monthly and after a year, realized they'd paid the equivalent of 19% once the maintenance markups, renewal fees, and eviction coordination charges were added up.
That's not an extreme case. It's a common one. The advertised rate is not the same as the total cost of management, and the gap between the two is usually explained in fine print that most owners don't read before signing.
This guide walks through every fee type you should expect, every fee type that often shows up as a surprise, and the specific questions that reveal whether a property management company in Denver is actually being straight with you about costs.
The Standard Fees (What You Should Actually Expect)
Before getting to the hidden stuff, here's what legitimate, expected fees look like in Denver.
Monthly management fee: Typically 8-12% of monthly collected rent for a single-family or small multi-unit property. Some companies charge a flat fee, which can be reasonable if the number is comparable. The monthly fee should cover rent collection, tenant communication, lease enforcement, basic accounting, and maintenance coordination.
Leasing fee: A one-time fee charged when a new tenant is placed. In Denver, the standard range is 50-100% of one month's rent. On a $2,400/month unit, that's $1,200-2,400 per tenant placement. This fee covers marketing, showings, tenant screening, lease execution, and move-in coordination. It's legitimate. The variance in the range is significant, so ask exactly where a company falls.
Lease renewal fee: Some companies charge a fee when an existing tenant renews. This is less universal - roughly half of Denver PM companies charge it and half don't. When it exists, expect $150-300 flat or 25-50% of one month's rent. If a company charges both a full leasing fee on placement and a renewal fee every year, you're paying a lot for tenant retention.
These are the fees most companies lead with. The rest are what you need to ask about.
[Wondering what Sheepdog's fee structure looks like and how it compares? We're straightforward about it. https://www.sheepdogpm.com/contact]
The Fees That Catch Owners Off Guard
Maintenance Markups
Most PM contracts include a 10-20% markup on maintenance invoices. A $400 HVAC repair becomes a $480 charge to the owner. A $1,200 water heater becomes $1,440. Over a year of normal maintenance on a Denver single-family, that markup often costs more than the monthly management fee.
This is not inherently wrong - the PM company is coordinating the work, managing the vendor relationship, and handling the follow-up. That has value. But it needs to be disclosed clearly, and you need to know the markup percentage before you sign. Some companies disclose it upfront; many don't until you ask directly.
The question to ask: "Do you mark up maintenance invoices? What's the percentage? Can I see a sample owner statement that shows how maintenance costs are presented?"
Late Fee Splits
When a tenant pays late, there's a late fee. In Denver, late fees typically run $50-100 per occurrence. The question is who gets that money.
Some companies keep 100% of late fees. Some split 50/50 with the owner. Some agreements don't specify, which means the company determines the split. If you're paying 10% of rent for management, the late fee split probably doesn't change your calculus much. But you should know what the agreement says before you sign.
Lease Renewal Fees
If this wasn't in the standard fees section above, it's because some companies bury it. A renewal fee isn't wrong, but an undisclosed renewal fee is a problem. Ask specifically: "Do you charge a fee when my current tenant renews their lease?"
Eviction Management Fees
If a tenant needs to be evicted, the PM company is doing additional work. Some companies include eviction coordination in their standard management fee. Others charge a separate eviction management fee of $300-600. Still others pass through the attorney costs only, with no additional markup.
Know what the eviction fee structure is before you're in a situation where you need it. The middle of an eviction is not the time to discover your PM charges $500 for the service you thought was included.
Inspection and Documentation Fees
Move-in and move-out inspections should be standard. What's not standard is whether they're included in the management fee or billed separately. Some companies charge $75-150 per inspection. A lease with two inspection events (in and out) could add $150-300 to your annual costs.
Some companies also charge for document preparation, lease modification addendums, or notice service. Ask what's included in the management fee and what's billed separately.
Vacancy and Make-Ready Fees
A small number of companies charge a "vacancy fee" during periods when the unit is empty. This is a red flag. A fee for the time when they're doing nothing is a fee for nothing. If you see this in a management agreement, push back or walk away.
Make-ready fees (coordinating and managing the turnover process) are different and more defensible. But again: is it included in the leasing fee, the management fee, or billed separately? Get a clear answer.
Termination Fees
This is the one most owners regret not reading carefully. If you decide to leave a PM company, what does it cost?
The right termination clause lets you exit with 30-60 days written notice, no penalty. The wrong one says you owe a "management fee equivalent" for the remaining months of the contract term, which can run $1,000-3,000+.
Before signing any PM agreement, read the termination clause in detail. If it penalizes you for leaving, negotiate it out or choose a different company. Your ability to change property managers without a large financial penalty is worth protecting.
The "Low Rate" Trap
The companies that advertise 6% or 7% monthly management rates in Denver almost always make up the difference elsewhere. This is not speculation - it's arithmetic. PM is a service business with real overhead. A company charging 6% either has economies of scale you're not benefiting from, or they're billing the difference through fees the contract buries.
Here's the actual comparison that matters: total annual cost of management, not the monthly rate. Add up the monthly fee, the expected leasing fee amortized over an assumed tenancy period, the renewal fee if applicable, the estimated maintenance markup on a typical maintenance year, and the inspection fees. Then compare across companies.
A company at 10% with no additional fees often costs less than a company at 7% with a full menu of add-ons. The only way to compare honestly is to ask every fee question, get answers in writing, and do the math.
The 8 Questions to Ask Before You Sign
These are the specific questions that surface the real cost picture. If a PM company gets evasive on any of them, that tells you something.
1. Do you mark up maintenance invoices? What's the percentage?
2. Who keeps late fees - the owner, the company, or a split?
3. Do you charge a lease renewal fee? How much?
4. Is eviction coordination included in the management fee, or is it billed separately?
5. Are move-in and move-out inspections included, or are they billed per inspection?
6. Is there a vacancy fee during periods when the unit is unoccupied?
7. What are the termination terms - what does it cost me to leave your management?
8. Can you send me a sample owner statement from the last 12 months so I can see how costs are actually presented?
That last one is the best filter of all. A real owner statement shows every charge in context. If a company won't show you a real (anonymized) statement before you sign, ask yourself why.
[These are the questions we answer upfront at Sheepdog - before you've committed to anything. https://www.sheepdogpm.com/contact]
What Transparent Fees Actually Look Like
Transparency in property management isn't just about having a low rate or a clean pricing page on a website. It's about three things.
No surprises at the owner statement. Every charge that appears on your monthly statement should be something you knew about before you signed. Nothing on that statement should require you to go back and read the contract to understand why it's there.
Clear answers to direct questions. A company that's transparent about fees answers the eight questions above directly, in writing, without hedging. "Our maintenance markup is 15%" is transparent. "We handle maintenance coordination as part of our comprehensive service model" is not.
No incentive misalignment. A transparent fee structure also means the PM company's incentives align with yours. A company that charges full first month's rent every time a tenant turns over has an incentive to turn over tenants. A company that charges a meaningful renewal fee has an incentive to renew. Make sure the fee structure rewards the behavior you want.
At Sheepdog, our lease is built and maintained in partnership with Denver's largest landlord attorney. The same standard applies to our management agreements. Every fee is disclosed upfront, in plain language, before anyone signs anything. That's what this should look like.
Frequently Asked Questions
What is the typical property management fee in Denver?
Monthly management fees in Denver typically run 8-12% of monthly collected rent. Leasing fees (for placing a new tenant) run 50-100% of one month's rent. The total annual cost of management, including all fees, often runs 15-25% of annual gross rent depending on the company's fee structure.
What is a leasing fee and is it worth paying?
The leasing fee covers marketing, showings, tenant screening, and lease execution when a new tenant is placed. In Denver, 50-100% of one month's rent is the standard range. It's legitimate - placing a quality tenant is the most important thing a PM company does for ROI. The concern is when companies charge at the high end and also mark up maintenance and charge annual renewal fees.
Do property managers take a percentage of maintenance invoices?
Many do, typically 10-20% of the invoice. This is common and not inherently wrong, but it should be disclosed clearly. Ask about it before signing. A company that marks up maintenance should be providing something in return - vetted vendors, fast response times, and warranty on the work.
What should a termination clause say in a PM contract?
The owner should be able to exit with 30-60 days written notice, no penalty. Anything that charges a "buyout" fee or equivalent management fees for the remaining contract term is a red flag.
Who keeps the late fees when a tenant pays late?
Varies by company. Some keep 100%, some split with the owner, some agreements are unclear. Ask directly before signing.
Is a lease renewal fee standard in Denver?
Roughly half the Denver market charges it, half doesn't. When charged, it typically runs $150-300 or 25-50% of one month's rent. Not automatically a dealbreaker, but it adds up - and a company that charges both a full leasing fee and an annual renewal fee is charging a lot for tenant retention.
How do I compare property management fees across companies?
Don't compare monthly percentages. Compare total annual cost assumptions: monthly fee + amortized leasing fee (assume average 2-year tenancy) + renewal fee + estimated maintenance markup on a $2,000 annual maintenance budget + inspection fees. The company with the lower monthly rate often wins on sticker price and loses on total cost.
What does Colorado's HB25-1090 mean for Denver landlords?
HB25-1090 is a 2026 tenant-facing law requiring landlords to disclose all mandatory fees in rental listings and prohibiting certain "junk fees" - late fees on non-rent charges, payment processing fees when a free option exists, and passing property taxes to tenants. It doesn't directly govern PM company fees charged to owners, but it signals Colorado's increasing scrutiny of fee practices in the rental market generally.
