Ranges first, then the part that changes your model.
Third-party management on a 12-unit typically runs 6 to 10 percent of collected rent, and the 5 percent number you're hearing comes from 100-plus unit properties where the fee base is large enough to carry the office. Many firms also apply a per-door or monthly floor, often somewhere around 75 to 125 per unit per month equivalent on small assets, so check whether the quote is percentage or floor, whichever is greater. A leasing fee of half to a full month's rent per new lease is common. At 12 units with 40 percent annual turnover that's roughly five leases a year, so budget it as a real recurring line rather than an occasional cost.
Software at this size is dominated by minimums. The full property management platforms usually price per unit per month in the low single dollars but carry monthly minimums in the few-hundred-dollar range, which works out to 20 to 30 per unit at 12 units. Lighter tools aimed at small landlords run flat monthly fees in the tens of dollars, or free to the owner with tenants paying transaction fees. Confirm current pricing directly, since these tiers change.
Insurance spread of 7k to 16k on one building is normal and it's mostly roof age, wiring, construction type, and state. Property insurance pricing and availability vary enormously by state, and in some coastal and wildfire markets the number is the deal. Get bound quotes before you remove your inspection contingency, not indications.
Lender-required replacement reserve escrows on this tier commonly land at 250 to 400 per unit per year, so 3k to 5k here.
On licensing, managing property you own is generally exempt from real estate licensing in most states, while managing someone else's property for compensation usually triggers a license and in many states must be done under a broker. Both the exemption and the broker requirement are defined state by state, so confirm with your state real estate commission before you take a fee from your friend.
The part that matters for value: if you self-manage, an appraiser will still deduct a market management expense, commonly 4 to 6 percent of effective gross, when they build the income approach. Your savings show up in your cash flow, not in the appraised value. People underwriting self-management as a way to raise NOI and therefore value are usually disappointed at the refi.
