Property management fees are important and when we look at them, they have to be seen as with any other business expense. First, of course, as a property owner, you want to look at the types of services and the quality of those services provided- but also, have a broad scope of different property management company quotes. Bear in mind, when you hire a property management company- you’re hiring someone to take care of a really big investment for you. As such…don’t you think they ought to be seen as an investment, too?
So, before you get hung up on the question of how much will property management cost? It’s important to consider the various fees you might see and why. Once you go from there, you can figure out how best to organize it all.
Set Up Fees In Property Management
This is going to vary from company to company. When you’re looking into this, make sure you ask if it’s per property or per unit. Additionally, as if vacancy of the unit is a factor.
Property Management Fee
Depending on the type of property you have, this is another one that will carry a significant price difference. Commercial properties will be different from residential but typically, this will be anywhere from 4 to 12% the amount of the monthly rent. On single family units, it’s sometimes in the neighborhood of about 10%.
This fee can also vary depending on the number of properties, number of units, location, and condition of property but also, what services the company will be providing you. Also, if you’ve got a property in Toadsuck, Arkansas, it’s naturally going to be a different cost than a property in Las Vegas. Market also plays a factor. There are also flat fee and hybrid pricing models depending on the company and you should find out if these will be billed or deducted from a special owner account.
Of course, we’ve gone into many of the ways that you can generate leads for your property- but if you’re going to hire a property management firm: it might be worth it to you to determine what they will charge you for this. Sometimes, this is a part of the leasing fee- so you need to ask who will be paying and how much this will be.
This is where things can get a bit complicated. Leasing fees are the way that the manager is compensated not only for their time, but for the effort and costs that go into finding you renters for your property. On occasion this is lumped in with the management fee, but not always. If you find yourself really liking one company and they do have this- you can ask them a few questions to ascertain worth:
- Is the leasing fee structured to offer incentive for finding reliable renters?
- How much is the fee itself?
- If tenants are not found in a reasonable amount of time, is this fee waived?
- Are leasing agents used?
- Are there any restrictions involved?
Lease Renewal Fees
If this is a big fee, this is a red flag that you’re dealing with a bad company. It takes very little work to draw up a renewal, and though it’s common to have a fee, it’s not generally common for it be be high.
These are just a few of the more common fees you may see associated with a property management company- and as you can see, this requires organization in its own right. Keeping things together and knowing what’s coming in, as well as what’s going on is important, even when you’ve finally found and hired one.