Finding the right property management company to work with your property is a big deal. Hiring a property management company includes giving control to them, as well as spending money.
Here are a few charges you can expect in the property management fees:
Generally the property management companies charge fee in the form of commission, flat fee, or bill per property. This would be around 8 to 12 percent of collected monthly rent on the property in addition to the expenses.
The monthly fee is determined based on many factors, so it’s better to find out the local rates of your property type.
Property managers find a tenant, do the required verification, make visits to the property, handle the check ins and check outs, collect the monthly rent, perform inspections, regular cleanings and maintenance, repairs and complaints etc..
The above mentioned are some of the basic services provided by the property management companies. Every company is different and has their own set of services offered and pricing range. So one should make sure if the charges and fees are mentioned in detail in the contract before signing the agreement.
The most common fees to expect are:
On-boarding or Registration fee:
A one time fee would be charged to establish partnership between the company and the client.
A one-time on-boarding fee may be charged to establish the partnership and open the account.
Some companies charge a vacancy fee, which is a small flat fee or regular monthly fee for unoccupied properties.
When there is a delay in monthly rental payment by the tenant, the company may charge a late fee. Which may be returned to the owner or a portion of the late fee will be charged by the company.
On the owner/tenant complaints and maintenance issues the companies may add a markup fee on the original costing to keep up as their commission.
Rent or Lease Renewal Fee
Some companies charge a flat fee at the time of the lease or rental renewal by the tenant. Also the client will be charged a small fee at the time of renewal of the contract between the client and the property management company.
Management companies may keep a part, commission,all of it or none of the income associated with some miscellaneous fees collected in the form of returned check fee, documentation charges, lease violation fees, unpaid invoice fees etc..
Some owners may feel that the property management companies are overcharging them especially when they see unexpected charges on their account. However, when a company handles all these stressful duties, attending emergency issues, hunting for rental collection, the owner won’t feel like wasting money or overcharged. These companies promote the success of the property.
What to watch for:
A thorough market research before opting to a property management company. Compare the pricing with other local companies.
Make sure you understand the terms and conditions of the agreement before signing the contract. Discuss all types of fees charged by the company.
Choosing an efficient property management company will lead you to a hassle free life.