A maintenance markup is an amount a management company adds to a contractor’s invoice before billing it to the owner. If a vendor charges $800 and the company applies a 10% markup, the owner is billed $880. Markups are common and, when disclosed, entirely legal. The reason they deserve scrutiny is not legality — it is incentive.
What a markup does to decision-making
Property managers make judgement calls on your behalf every week. Repair or replace. One vendor or another. Fix it now or watch it. Those calls are worth more than the fee difference between management companies, and a markup quietly tilts every one of them.
Under a markup, the more your property spends, the more the manager earns. Nobody needs to act in bad faith for that to matter. It just means the cheaper option is never the one that pays better, and over years of small decisions that shows up in your operating costs.
The forms a markup takes
| What it is called | How it works | How to spot it |
|---|---|---|
| Percentage markup | A fixed percentage added to every vendor invoice | Compare the vendor’s invoice with your statement line |
| Coordination or handling fee | A flat charge per work order regardless of size | Look for a repeating small charge next to each repair |
| In-house maintenance rate | The company’s own staff billed at an hourly rate above cost | Ask what the hourly rate is and what it covers |
| Vendor rebate | The vendor bills the owner directly but returns a share to the manager | Ask directly whether the company receives anything from vendors |
| Bundled minimum | A minimum charge per visit that exceeds the actual work | Ask how a ten-minute repair is billed |
The last two are the ones owners almost never find on their own, because neither appears anywhere on a statement. They only surface if you ask.
Six questions to put in writing
Ask these of any company you are considering, and ask for the answers in writing rather than in a meeting.
- Do you add a percentage or a fee to vendor invoices? If so, exactly how much?
- Will I receive the vendor’s original invoice, or a statement line you generate?
- Do you receive any rebate, commission, referral fee, or other consideration from any vendor who works on my property?
- Do you own, or share ownership with, any of the vendors you assign to my property?
- Is there a per-work-order coordination or administrative charge, separate from the vendor cost?
- How is after-hours and emergency work billed, and is the rate different?
A company that does not mark up will answer all six quickly and in plain language. Difficulty producing a straight answer to question three is itself informative.
Set an approval threshold
Independent of markups, agree a dollar threshold above which the manager must get your approval before proceeding. Below it they act — a running toilet at 9pm should not wait for an email. Above it, you decide.
Most owners land somewhere between a few hundred and a thousand dollars depending on the property and how involved they want to be. Pair the threshold with a standing rule for genuine emergencies: anything involving water intrusion, gas, electrical hazard, loss of heat or hot water, or habitability gets handled immediately and reported straight after. Setting the threshold too low is a real cost — every small repair becomes a round of emails while the resident waits.
What good maintenance reporting looks like
- The resident’s original request, with the date and time it was submitted
- What was diagnosed, and by whom
- The vendor’s own invoice, attached and readable
- What you were billed, reconciling to that invoice
- Photographs before and after for anything substantial
- Whether the work is under warranty, and for how long
If you can see all six for every work order without asking, you can verify there is no markup rather than taking anyone’s word for it. That is the standard the owner portal is built to meet.
Frequently asked questions
Compare the whole cost, not the headline
Maintenance handling is where the difference between two management companies compounds most quietly. See how UnitSimple prices management on the pricing page, or run the numbers on the comparison page.
General information
This article is general information for rental property owners. Costs, timelines, and local requirements vary by property and change over time, so treat the figures and processes described here as a starting point rather than a quote or a rule, and confirm anything specific to your building before you act on it.
Have a property you want to discuss?
Full-service management is $100 per unit per month, ordinary leasing included, with no UnitSimple markup on maintenance.