A property manager normally charges around 10% of a home's monthly rent. However, the cost of a property manager directly correlates to how much work you want them to do. If you want them to keep track of the repairs, they will charge less than if you want them to take care of tenants and the structure of the building.
There are also various property management companies offering their services for differing amounts, but the best property managers typically charge about 10% of the monthly rent. Expect to pay this amount when looking for a solid property manager for your space.
If you look at your contract, you can see how the fees work. From here, you can determine the cost.
Rent due and rent collected can help determine how your property manager is paid. Ideally, their funds should come from the rent collected and not the rent needed.
Rent collected is the amount you receive, while rent due is what you should receive. If someone moves out or doesn’t pay, you’d be supplementing the property manager out of pocket. Give them a portion through rent collected to keep your income similar.
- Management fees
- Vacancy fees
- Setup fees
- Maintenance fees
- Lease renewal fees
- Early termination fees
- Leasing fees
- Eviction fees
1. Management Fees
The most common type of property management fee is the management fee. Every month, the property management company might require you to pay a fee for their service. This cost is to keep their services with you and to pay their employees for helping you out with your investment.
This price will be a small percentage of the money you receive from your rental units every month. You can talk with your company to determine what this amount will be for your space.
2. Vacancy Fees
Vacancy fees are charged to re-lease the property if it ends up empty. You need to pay this amount.
For this fee, you can anticipate paying a little less than a month of rent. This will permit the company to get everything on track.
3. Setup Fees
Setup fees happen when you first contact a property management company and bring them on board. It’s a flat fee that only happens once.
A setup fee works to cover setting up your account with the company or buying materials to help the new tenant communicate. It covers everything necessary to get a relationship between the consumer and the company. From then on, they are equipped to help you handle your investment.
4. Maintenance Fees
Maintenance fees cover the cost of breaks and repairs that appear during the year. Most of the time, they won’t cost too much extra. The most expensive repairs can be a little more than a month’s rent in cost. Your property manager will need to approve any fixes before they happen.
Of course, you can always try to take on repairs by yourself. You should only do this if you know what you’re doing to avoid further breakage. Breaks are bound to happen while you live in a space. Maintenance fees help keep everything intact.
5. Lease Renewal Fees
Lease renewal fees work to renew the lease for some tenants. It isn’t very much.
Several fees come from a property manager when renewing a lease. It’s critical to consider all of them.
6. Early Termination Fees
When you work with a property management company, you sign a contract. If you terminate early, there are fees.
The contract should let you know how much early termination will cost you. Ensure you read this ahead of time.
7. Leasing Fees
These fees are close to tenant fees. They cover the cost of moving new people into the building.
Some companies charge a percentage, while others use a flat fee. It will cover everything from screenings to advertisements.
8. Eviction fees
If a property manager needs to evict someone, they’ll charge you. This cost can be at least one hundred dollars.
They might charge you for court costs that appear from the eviction. Keep funds aside if you see an eviction coming.
It can be pricey to hire a property manager, but they take care of a lot of the work that would otherwise take up most of your day. As an investor, a property manager can give you the time to continue making excellent investments for your life.
As the owner, some of the other factors that might impact the price of a property manager include:
- The location of the property
- The condition of the property
- The size of the property
A massive, run-down apartment building will cost more with a property manager than a pristine two-bedroom home.
Once you understand how to look for baseline payments and what the property manager will charge, you can decide which is better for you. Some might like the relief they provide, while others might prefer to save money and take everything into their hands. The choice is yours.