It is becoming a very common practice for people to buy multiple houses as an investment and to use those houses as a means of generating income. These people are essentially buying a home and using renters to cover their mortgage. It is a great way to build wealth and to set yourself up for a solid amount of passive income once the mortgages are paid off. The catch though is that you can spend a lot of time just taking care of the houses and dealing with renters. It is extremely time consuming and there can be instances were you can become very stressed out over different renters or problems with the home. The other thing that you need to keep in mind is that you have to continue to keep the house in good repair and remodels are likely to be needed over the span of the mortgage (likely 30 years). In order to relieve some of the stress and time from these properties people will pay for ri+property+management.
Property management is essentially paying someone else to worry about all the things I just listed. The way it can work is that you will usually find a company like nexri who is involved in property management. You can decide what services that will perform for you. Do you want them just to worry about the physical structure and property or do you also want them to take care of renters and payments? Depending on what services you want to have performed will determine how much of a percentage they will take. Most property management companies do not do a flat fee, but instead will take a percentage or the rents that are being paid on the property. This can range from 3 to 10 percent depending on the level of service that you are interest in getting.