Property management companies act as a link between the landlord and tenants. You want to ensure you are getting best property management services for the value of your money. The services of a property management company range from a single package to all-in-one package. However, these services do not come free; rather they come with various fees. It is difficult to come up with a fee structure used by various companies. However, you should learn about the common fees to expect and what it stands for. In the end, you can compare fee structures provided by various companies and choose one that meets your budget. The following are the common fees:
This is a monthly fee that is charged to the landlord to compensate property management firm for responsibilities of overseeing his or her property. The fee can vary from 10 to 15% monthly of gross rent. Other than this percentage, managers can charge a monthly fee that can be about $200. In fact, nearly all property management firms charge this fee.
Setup or Lease-up fee
This is the fee charged to the landlord as compensation to the initial resources and time spent to set up owners account, advertising your property and other activities that result in tenant placement. After the tenant has been placed, the property manager deducts the fee upfront from first-month rent. You should note that the fee is non-refundable in most cases.
Lease Renewal Fee
This is a fee charged when property managers renew an expiring tenants lease. It covers paperwork costs and communication costs that involve implementing new lease document. This fee may be justified if they carry out an annually property inspection. It can start from $50 or higher. Moreover, the fee may be charged every time a lease is renewed.
This depends upon property management firm contract. You may be required to pay the advertising fees or share the costs. It is advisable to find out the type of advertising campaigns they carry out. If the company just places listings on their sites or classifieds sites, you may not be getting the real value of your money. Nowadays, there are many tenant resources online that can bring prospective tenants are reasonable fees. You should not forget yard signs, print media, open house, and listings on MLS. Having a vacant property can result in losses. Other property management costs include maintenance fees and early cancellation fees.