What’s Actually Included in Your Property Management Fee? Here's What Indy Investors Need to Know
If you've ever searched “How much does property management cost in Indianapolis?” you’re not alone. It’s one of the most searched phrases for local rental property investors. But focusing only on the percentage number—like 4%—can be dangerously misleading.
In this episode of the Red Door Property Management Podcast, our team breaks down the biggest trap investors fall into: asking the wrong question. The most common (but flawed) question? “How much do you charge?” Instead, what you should be asking is: “What’s actually included in your management fee, and what’s going to be an added charge down the road?”
The Real Cost Behind 4% Property Management Fees
We recently consulted with a local investor who was nervous about leasing her home. She had just spoken to a national company offering 4% management fees—plus bold guarantees like covering 3 months of missed rent and up to $5,000 in eviction costs. Sounds great, right? But these offers often hide extensive fine print, and more importantly, lack local “boots on the ground” support.
Investors need to consider what's not included in low-ball pricing. Many discount firms charge extra for:
- Tenant screening
- Lease preparation
- Property inspections (which they may not even perform if they’re not local)
- Maintenance coordination
Compare Apples to Apples: What Red Door Includes
At Red Door Property Management, our all-inclusive 9% management fee includes:
- 24/7 maintenance line – So you’re not fielding late-night emergency calls
- In-house leasing and marketing – Including virtual tours and professional photos
- Transparent owner portal – With live access to financials and tenant records
- Hands-on lease renewals – With annual rent evaluations and increase strategies
- Video inspections for move-ins, move-outs, and during tenancy
- Fraud prevention – With enhanced tenant screening for IDs, paystubs, and more
Our local expertise means we know the unique dynamics between Westfield, Noblesville, and the various submarkets of Indianapolis. One-size-fits-all pricing models from out-of-state companies simply can’t compete with boots-on-the-ground service.
The One Question Every Investor Must Ask
Here’s the golden question: “What’s actually included in your management fee, and what’s going to be an added charge down the road?”
That single question will uncover more about a property management company's transparency, capabilities, and value than any percentage rate ever could.
Final Thoughts
Don’t be short-sighted. Saving $50 a month could cost you thousands in missed rent, poor tenant quality, or unmanaged repairs. Focus on value—not just price.
For investors looking to protect and grow their rental portfolio in Indianapolis, choosing the right management partner is essential. Red Door Property Management offers full-service, local support built around transparency and long-term results.
Follow us for more expert insights, and stay tuned for our next podcast as we go behind the scenes with our leasing team!
Transcript Here
 
Introduction and Welcome
All right everybody. Welcome to the Red Door Property Management Podcast. We are changing things up, as in fact, we got a lot of new segments we're gonna add here today. But before we get into it, let me introduce Mike Taylor, broker owner of Red Door Property Management. How's it going, Mike?
Really good, Chris, how you doing? I'm doing really good today. I'm doing really good. I got all the windows open. I'm for sure you're gonna hear some people mowing the grass. Maybe a couple birds chirping, but you're gonna, that's outside, man. It's beautiful. I freaking love it. So we're gonna leave that the way it is.
Hopefully the mic is working. Welcome to the show and yeah, without further ado, let's sit back. Let's get started and let's chit chat.
Question of the Week: Property Management Costs
Let's get into this week's question of the week. All right, let's dig into this. This is a big one, and I really had to spend some time thinking about this one because I wasn't sure how I was gonna present it.
I don't wanna give the competition a leg up, but I wasn't sure how to present that. I really want your honest feedback as we go along. Okay. Here it is. Here's let me start with, here's what I was dealing with, and then I'll go into the question and how I think it should be structured in a way to reveal what it is.
The customer is trying to expose when they ask the question.
Case Study: Competing Property Management Offers
So what I dealt with this last week was an owner. She was great. This was a completely new experience that she was about to get into. Anything real estate renting out her current home would, while she moved to another state, she was admittedly.
Very nervous about even considering it. Who she talked to right before I got her on the phone was a company that was not local pretty well known for their marketing here recently, at least coming across my algorithms. But is a company that offered 4% as a monthly management fee, but was not local.
Okay. They didn't have any of those services. And in addition to that, what they did have was and let me look at my, some of my notes here is. Some of the guarantees that they offered, if a tenant doesn't pay their rent, they will up to three months. They will ensure that this owner gets their agreed monthly rent payment on the first for at least three months.
In other words, if that tenant stops paying their rent for up to three months, they're gonna cover it. After that, they're gonna have to explore other options. And then in addition to that, if an eviction is ever necessary, they will cover up to $5,000 of anything related to that eviction.
Okay. So that is what she was dealing with. She actually she wasn't moving to another state. She was gonna remain local. So that's, that is important to the story because. She was willing in order to keep some of the costs down, she was willing to organize any maintenance and do any, anything that was going to be related to where the value of having the boots on the ground was really gonna cover.
So let's, let me start with that, Mike. And what I, and here's the question that I'm ultimately wanting to get to, is one of the most common questions. In fact, based on some research, the most common question that is searched is.
Understanding Property Management Fees
How much does a property management company charge? Or in other words, how much does property management cost in Indianapolis?
That is one of the most searched up terms ever when in, in relation to property management. Here's what we wanna focus on. Focus focusing on. Only the fee itself can lead. To misleading the real cost, the services that aren't actually included. And that's what I wanna dig into. Mike, gimme your initial thoughts on just the overlay there.
I would like to see the fine print because that just does not make sense. 4% and then you're gonna cover 5,000 of an eviction and then three months of rent. I mean that as a business owner, that just doesn't make sense. So there's gotta be some fine print that we are not hearing about. We are missing.
Something. Something is That's so funny. It's if it's too good to be true, then it probably is. That's my initial reaction.
That's so funny. That's exactly that to a t That was my exact reaction is is I would be sure. And this is exactly what I told her. And I wanted to assist her more than I wanted to.
And I, earning her business would be a plus. Yeah. But I wanted to assist her. I was like. You've gotta make sure you dig into that fine print. Are there any stipulations that the property would have to meet in order to qualify? Because what you don't want to happen is that first rent payment to be missed and then to come back and be like, oh, your rent wasn't set at 2000 a month, so it didn't meet those qualifications, right?
So dig into that fine print, insist on the fine print. But here. Here are some other points that I wanted to mention here in this discussion. So the average fees in the Indianapolis market is typically a monthly management fee is anywhere from eight to 10% from a well established property management company.
Now, you are gonna be able to find these one-offs, these realtors who do it on the side, who might charge a little bit less than that because they don't have any of the expenses set up. And we'll get into some of that here in just a minute. But the leasing fees average anywhere from 50 to a hundred percent of one month's rent.
I find that it's closer to the a hundred percent of one month's rent for the well-established companies. I've been working with Red Door for almost 15 years now. And so I know who the good players are. And those good players, honestly are charging a hundred percent. In fact, there's been so many times I've come to you and been like, it wanted to be like, you know what?
I think we need to increase our leasing fee to a hundred percent. So that people are observing us as one of those top players. In fact, we give people a break because ours is only 8 95 that comes outta the first month's rent no matter what your rent is set at. So let me read these and then I'll let you chime in on some of these.
Lease renewal fees, they vary anywhere from a hundred to $400 on average. And then a lot of companies also have setup fees which we do not. I'm sure anyone who's watching this already knows that. But a lot of management companies in this company that I, I was referring to, they did have setup fees that were gonna be, in addition to anything that I previously mentioned, they're gonna have maintenance coordination fees, which is pretty much standard these days.
A lot of companies are gonna have some type of a maintenance coordination fee. Or tacking on an additional percentage to, to to the maintenance charge itself. So these are gonna differ based on property type number of units and of course the level of service. So gimme a highlight on fee structure and things like that.
Anything to add to any of that?
I
think you just gotta make sure
that you don't get. Persuaded, distracted, misled, maybe, I think is maybe the right word I'm looking for by one number that some company's trying to put in lights, like 4%. You gotta look at the entire fee structure. It could be 4%, but then they have a $3,000 leasing fee or something crazy.
I have no idea what company it is or what you're talking about, but you have to look at the entire. Picture and the entire structure Hey, what is property management gonna cost me over the course of a year to get a home leased, to get it renewed, to coordinate the maintenance.
Just make sure that you're comparing apples to apples and looking at the entire fee structure, not just one fee that you're focused on, whether that's a leasing fee or lease renewal fee, or a management fee. Don't get stuck on one fee. Look at the entire fee structure. Yeah, exactly. So I'm glad you asked.
This works out perfectly because you take me into the second part of this is because the lower fee isn't always the better deal. In fact so as I was putting together some notes for this discussion I was listing out and things came to light. I wish I would've had this in my hands when I had the discussion with her at the time.
But these are when you're comparing those companies apples to apples. Exactly. You nailed it.
Importance of Local Property Management
And this is exactly how those companies are getting away with charging 4%, which honestly, let me share my own personal opinion here. If I'm putting one of my largest assets Yeah. With a company and I'm walking away from it.
Certainly if I'm walking outta state is, I have to know that you have someone local. Yeah. If there's a major leak, I have to know that you're gonna be able to send someone out there to give me photos and not just rely on calling. Someone in the Yellow book, an HVAC company or a plumbing company outta the yellow book and hoping that they're going to achieve what it is that's necessary in order to properly document what's happening at your property.
So having boots on the ground for one of your largest assets to me is so important. It's so important. So that number one, okay, so how these companies and things that you need to dig into when you're comparing one of those type of companies with a boots on the ground type property management company.
It's. Those companies are often offering what's called an ally cart type essential services. So they are probably going to charge additional fees for tenant screening. This is all in addition to whatever percentage on the month that they're gonna be charging. So tenant screening charges, lease preparation charges, inspection charges, which I don't know how they're gonna complete an inspection because they're not local, and if you're not having an inspection completed.
That's bonkers, that's crazy to me. And maintenance follow up charges. So there are going to very likely be numerous additional charges that are gonna pertain to them, overseeing your property that aren't going to be disclosed or captured in the 4%. For what this company was actually often, and what can this lead to?
So having these additional charges or having a company like that manage your property can lead to lower tenant quality, more property turnover of course, and deferred maintenance, becoming expensive repairs, deferred maintenance. If you didn't catch that in our last podcast, you've gotta go back and see it.
We, we talked all about maintenance and why it's important to handle the maintenance and how that directly reflects your tenant retention. So you've got to go back and check that out. But this is, this bleeds one, bleeds into the other, right? So that's, those are things that you've gotta be looking into, aside from just asking the question, how much does a property management company charge in the city of Indianapolis?
You've got to be digging in deeper to those details. Yeah. What are the other, what are the other charges? Do anything to say on that, and then I will give you the one-liner question to ask going forward. Mike, anything? Anything to add to that? Yeah, no I, it's like you've already hit it, but what are you getting for that fee that you're paying for?
How many I. How many employees do you have per property that you manage? Do you have in-house maintenance team? All of these questions are really important. If you're hiring somebody who's gonna be at 4%, I'm gonna pretty much bet everything I have that they probably don't have people here that are probably, they're just like a national call center and they just deal everything from one central location. The importance of having this local boots on the ground, local knowledge, like we're trying to disseminate here on, on the podcast is so important. Knowing just the local different areas, knowing that Westfield is different than Noblesville, which is different than Indianapolis, which are different in different parts of Indianapolis are different.
So knowing. The pricing structure, how to do all that is so important. And if literally, like you said, this is a lot of times one of people's biggest assets, it could be a 2, 3, 4, 500. We manage homes up to a million dollars. And if you're gonna be concerned over saving 50 or 60 bucks a month, in my opinion, that's a little bit shortsighted.
I would be focused more on the quality of what you're getting versus, saving a couple bucks a month trying to find the cheapest provider.
Yeah. Bingo. E exactly. For all the reasons we just quickly discussed. So here it is the real question that you should be asking. Here it is, and I typed this out, so it's absolutely perfect.
Here we go. What's actually included in your management fee and what's going to be an added charge down the road? So what's actually included in your management fee and what's going to be an added charge down the road? Do you charge anything extra for any of these additional services? Like tenant screening, lease preparation inspections, anything like that.
Those are the nitty gritty details that you need to be digging into. And in my opinion, insist on having boots on the ground if at all possible. Now, if you have some experience in handling maintenance or performing your own inspections, maybe it's a better idea for the former, but. I you better have some pretty good qualifications in both of those areas.
Red Door Property Management Services
If you don't have somebody who's experienced that you're gonna hire, let me talk for just a minute about what Red Door includes that others don't. So this is something that is going to include having somebody's boots on the ground and things that are included in a little bit higher, which ours is 9% on a monthly management fee.
But these are things that are going to gonna be included when you're working with Red Door Professional Marketing. So virtual walkthroughs. In-house leasing coordination 24 7 maintenance line, which is absolutely essential in my opinion. That's probably the number one concern that owners have when they're managing a rental property.
Even if they've done it for several years. The reason they wanna hand it off to someone else is they're sick of handling those 1:00 AM plumbing leak issues. They don't want to answer the phone for that anymore and try to find and coordinate a maintenance repair. 24 7 maintenance line coordination, transparent owner pool.
Owner portal and reporting, which is absolutely amazing these days, including realtime tenant ledgers all of your reporting statements that you can literally pull on your own anytime you're in need. Preemptive rent, pricing strategies, and hands-on lease renewal process with rent increases when they're appropriate.
So that includes running a rental analysis on an annual basis to determine if the market would allow a potential rent increase. And then negotiating those terms with your tenant. So these are things that you are very likely gonna pay in addition to your 4% or whatever it may be for one of these non boots on the ground.
Type offsite management. Go ahead Mike. I got a couple of that. Chris. What about professional marketing photos? So important. All of our homes get professional marketing photos. I see some of these photos out there. They're like done with an iPhone or, yes. Oh my god, they're terrible. All of our homes get professional marketing photos.
We do video walkthrough, move-ins and move outs. We share those with the owners. Just in full transparency we do video walkthrough inspections. Again, we share those with the owners. So many property managers out there either don't do inspections or just, oh yeah, I do 'em. But there's no accountability.
Excuse me. Accountability. We literally physically walk you through it and share it with you. We upload it to YouTube and then share the link with our owners. So just try to be as transparent as possible. Also in depth tenant screening. That has been a huge thing for us this year. The fraudsters are out there in full effect.
We can see fake IDs, we see fake pay stubs, we see fake social security cards. Our team and our technology has really ramped up over the last couple of years to try to catch all of these things. Yeah, just a couple more to add.
Yeah, there's so much more things to add and we're gonna save a lot of those as we dig into deeper questions as this podcast continues.
So stay tuned for more of these type of questions and how you can dig into 'em. And we, when we get into meet the team segments we're gonna dig deeper into what happens behind the scenes, the things that you don't even. No the 'cause you're asking these surface level questions, you have no idea what actually happens behind the scenes.
So I can go on and on, but that's gonna wrap up this segment. Be sure that you're asking the right questions when you're exploring property management companies here in the Indianapolis area. That's just one area that's going to hopefully save you some headaches down the road.
