Partnering with a property management firm to represent your property is a big decision if you own rental property. While lots of owners handle their properties, using a management company is an alternative strategy to secure rental income while saving stress and time. Working with a property manager does lead to less income from your property because of owed management fees.
If you are thinking about working with a property manager or currently working with one, exploring property management company costs is a good idea. There are numerous costs that can be included and added to property management duties. Below are some typical property management costs investors need to expect to pay.
Types of Property Management Fees
Although property management charges refer to the amount charged for looking after leased property, property management firms charge the fees in different methods depending on their needs. A few of them are listed below:
1. Monthly Management Fee
It is a self-explanatory term that refers to the monthly cost paid to a property management firm for its services. This settlement is made for the different services provided by the group, such as getting rent from tenants, frequent inspection of the property, property maintenance, solving renter problems during late hours, and so on. This cost commonly ranges between 7% and 10% of the monthly rent collected from tenants. Check this page for more information.
2. Leasing Fee
This cost shows the time and works spent finding a tenant, presenting the property, conducting a background check and credit check, and creating the lease and other legal files. Generally, this one-time fee ranges from 75% to 100% of the first month’s rent. You can also find out how hard is it to rent a house and how long it takes.
3. Maintenance Fee
It primarily refers to investments made by the company to keep your property in good condition. Generally, this fee is based on the terms and conditions agreed upon by the property management firm and the landlord. If the property owner is accountable for the property’s maintenance, no charges are paid to the team, or else the obligation is placed on the team’s shoulders. The group pays based on the terms, conditions, and maintenance charge.
4. Eviction Fee
In many cases, the landlord might wish to have his property vacated before the end of the contract. In that case, the management company can help him evict the tenants mainly through mutual agreement or court order. The property management company can charge reasonable fees based on the work and time.
5. Late Fee
Landlords or property managers charge late fees to occupants that do not pay their rent on schedule. If the tenant does not pay rent by the set date, the property management company may collect the total amount or a prorated amount of the rent. You can visit websites like https://www.alarca.com/davidson-property-management/ to learn more about property management.
It’s also essential to remember that many property management fees are charged as a percentage and are determined by factors specific to your property, such as location, number of units, and expected workload.
Final Thoughts
Partnering with a property manager is an important choice for an investor. While you may be more than qualified, a property management firm can sometimes make your business (and life) much more convenient. Evaluate the advantages and disadvantages of employing a property manager, and be prepared to research what is ideal for you. Property management fees must be considered a small price for more time and less inconvenience with the right company.
