Owning rental property can be one of the most reliable ways to build wealth. But as many owners quickly discover, managing property isn’t as simple as collecting rent checks. From late-night maintenance calls to tenant screening, legal compliance, and bookkeeping, the job can easily become a full-time responsibility. That’s where a professional property management company like Countryside Property Management, LLC comes in. We take the stress out of owning rental property, turning it into a streamlined investment. A common question we hear is: “How does a property management company earn money?” In this post, we’ll break down the revenue model of property management companies, explain what you’re really paying for, and address whether our fees are tax deductible.
The Basics: Management Fees
The primary way a property management company earns money is through a monthly management fee. At Countryside Property Management, we believe in straightforward, transparent pricing. Unlike many companies that advertise low base rates but tack on extra fees for renewals, inspections, or maintenance calls, we charge one clear fee with no hidden extras. For our clients, this fee covers:
- Rent collection: Ensuring rent is collected on time and deposited directly into your account.
- Resident communications: Serving as the point of contact for residents, so you don’t have to take calls at 10 p.m. - Maintenance coordination: Scheduling, supervising, and paying trusted local vendors.
- Accounting and reporting: Providing monthly statements and year-end tax documents.
- Compliance oversight: Keeping you compliant with Tennessee landlord-tenant laws.
This single fee is the foundation of our business model and ensures our incentives are aligned with yours: we succeed when your property performs well.
No Leasing Fees—A Better Way to Do Business
Most property management companies charge a leasing fee each time a new resident moves in. These fees often amount to 50–100% of the first month’s rent, making them one of the most significant costs for property owners. At Countryside, we’ve chosen a different path. We do not charge a leasing fee. Here’s why:
- Resident turnover is already expensive for property owners.
- Our focus is on long-term partnerships, not short-term charges.
- By including leasing efforts in our standard management fee, we keep your costs predictable and aligned with your investment goals. Instead of adding financial pressure during a turnover, we concentrate on marketing your property effectively, screening residents thoroughly, and ensuring a smooth move-in process—all included in your management fee.
Renewal Fees (Or Not)
Some property managers also charge lease renewal fees each time an existing resident renews their lease. These can range from $100 to a full month’s rent. We take the same approach as with leasing: renewals are included in your management fee. We believe strong resident retention benefits everyone, so we don’t nickel-and-dime our rental property partners.
Project Management: Renovations and Capital Improvements
Another way property management companies can earn money is by overseeing large projects, such as renovations, remodels, or capital improvements. At Countryside, we know that updating your property can increase rental value, improve resident satisfaction, and extend the long-term health of the asset. But coordinating a renovation—finding contractors, scheduling work, monitoring progress, and ensuring quality—can be overwhelming. That’s why we offer project management services for major repairs or renovations. For a clearly defined fee, we:
- Develop a scope of work and budget.
- Source and coordinate licensed, insured contractors.
- Oversee timelines and quality of workmanship.
- Ensure the project aligns with local codes and standards.
- Provide progress updates and financial transparency throughout the process. This service allows you to make major improvements without the stress of daily oversight, while we ensure the project is done right. It also represents another revenue stream for our company—one tied directly to the growth and profitability of your investment.
Maintenance Coordination
In addition to monthly management and project oversight, property management companies sometimes make money by adding a markup to maintenance invoices. For example, if a plumber charges $200, the property manager might bill the owner $220 and keep the difference. We don’t operate that way. At Countryside, we pass vendor invoices directly to our partners without hidden markups. Our value is in negotiating fair pricing, ensuring quality work, and coordinating repairs efficiently—not in inflating costs.
Ancillary Fees Many Companies Charge (That We Don’t)
The truth is, many property management companies supplement their income with additional fees, including:
- Inspection fees
- Maintenance call fees
- Notice posting fees
- Eviction coordination fees
- Advertising fees
While these practices are common in the industry, they create friction between property owners and managers. We’ve chosen a different path: one fee, clearly defined, with no surprises.
Why Our Fee is an Investment, Not Just a Cost
It’s natural for property owners to focus on the expense of hiring a property manager. But when you consider the time saved, vacancies reduced, and costly mistakes avoided, management fees often pay for themselves. Here’s how we help maximize your return:
1. Minimizing vacancies – Through professional marketing and screening, we reduce the time your property sits empty.
2. Protecting your asset – By coordinating regular inspections and maintenance, we catch small problems before they become big repairs.
3. Ensuring compliance – Mistakes with Tennessee landlord-tenant law can be costly. We make sure your leases, notices, and procedures are legally sound.
4. Improving resident retention – Good management means residents stay longer, saving you from turnover costs.
5. Managing renovations wisely – By overseeing large projects, we help you add long-term value to your property without the headaches of contractor wrangling.
Are Property Management Fees Tax Deductible?
Yes—property management fees are tax deductible. In the U.S., the IRS considers property management fees an ordinary and necessary expense of operating rental real estate. That means our monthly management fee, along with charges for project management and related services, can generally be deducted from your rental income at tax time. This helps reduce your taxable rental income, lowering the amount of tax you owe. Other deductible expenses include:
- Mortgage interest
- Property taxes
- Insurance premiums
- Repairs and maintenance
- Utilities (if paid by the owner)
- Depreciation
Of course, we always recommend consulting your tax professional for advice tailored to your situation. But for most owners, property management fees are indeed deductible, making our services even more cost-effective.
The Bigger Picture: Long-Term Value
At Countryside Property Management, our business model isn’t just about earning fees—it’s about creating long-term value for our rental property partners. By protecting your investment, saving you time, and maximizing profitability, we make owning rental property less stressful and more rewarding. Think of us as a financial partner: when your property thrives, so do we. Our steady, transparent fee structure keeps us focused on performance, not on add-on charges.
Conclusion
So, how does a property management company earn money? Primarily through management fees, project management for renovations, and sometimes through additional charges. But not all companies are created equal. At Countryside Property Management, LLC, we’ve built a model around clarity, fairness, and results. Our flat-fee structure, no leasing fees, no renewal fees, and commitment to transparency set us apart in the West Tennessee market. Add in the fact that our fees are generally tax deductible, and the choice becomes clear: hiring us isn’t just an expense—it’s an investment in the performance of your rental property.
If you’d like to learn more about how our services can help you build a more profitable rental portfolio, contact us today at www.countryside-pm.com.
