When you consider and compare property management fees and costs, it is important to understand that what most people are really looking for is value. You want value in terms of the quality of service you get and the amount you pay for property management services. It’s interesting that one out of every two calls we get here at Realty Services is from someone who already has a property management company, but is not happy with the services being provided. Remember that you get what you pay for. If you invest your time, money and property with a professional company, you need to understand what you are getting in exchange for their structure of fees. There are three basic fees that a professional management company will charge.
Initial Management Fee
This is the fee you pay when you sign on with a property management company and they take over the management of your property, but what does it cover? Make sure they do something for this money. They should perform a rental analysis of your home, take photos, set you up in their system for online statements and get your banking and financial accounts aligned with their systems so automatic transfers and payments will be seamless. These are time consuming things that are done to set you up, which is why there is an initial fee.
The leasing fee is usually charged as a percentage of one month’s rent or a percentage of a full year’s rent. It covers the costs involved in getting a tenant screened and into a lease. Find out if you get a guarantee with this charge. For example, what if a tenant breaks the lease after two months and moves out? Are you going to have to pay the leasing fee again to get a new tenant in place? Find out what kind of marketing and other advertising services are included in this fee. Ask if the company does videos and stages the property to make it attractive to renters, so it does not sit vacant on the market.
The management fee is pretty standard, and most landlords understand the purpose of paying it. You should find out if the property manager charges when your property is vacant. If they don’t charge, does this mean they are not going out to the property once in a while, and checking it out? If not, it is sitting there unmanaged because the property management company is not getting paid.
There are a few other charges that some companies will hit you with. They might charge for handling maintenance issues, particularly emergency maintenance problems. There might be an extra cost associated with handling security forfeit claims and tenant complaints. At Realty Services, we keep things simple. We believe that a simple fee structure gives people the framework to help them make a decision when choosing their investments.
If you have any questions about property management fees or how we might be able to help, please contact us at Realty Services Property Management.