Read on to learn more about how much property managers charge. They can provide valuable help any investor will find to be a relief in their life. Ensure you consider your budget and need to see if a property manager will work for you. There’s quite a bit to cover, so let’s dive right in.
On average, 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.
Various property management companies offer their services for differing amounts. Many cost about 10% of a single-family home’s 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.
Certain property management fees come up more than the others. It’s critical to understand these, so you can prepare for future payments you might have to make when you move into a location. These will help a property manager handle your investment with ease.
The most common property management fees include:
- Vacancy fees
- Management fees
- Setup fees
- Maintenance fees
- Lease renewal fees
- Early termination fees
- Leasing fees
- Eviction fees
These cover different things that will come with managing a space.
Let’s dive into each of these property management fees so you can better understand what they cover. Each one plays a critical role to a property manager, helping them get paid and keeping your property in working order.
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.
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.
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.
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.
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.
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.
These fees are close to tenant fees. They cover the cost to move new people into the building.
Some companies charge a percentage, while others use a flat fee. It will cover everything from screenings to advertisements.
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.