How much will your home rent for?
The cost of professional property management varies and depends on your location, the type of property you own, and the company you choose. Today, we’re discussing a few of the standard fees you can expect, and talking about why the services you receive are even more important than the money you’ll pay.
Leasing Fees and Tenant Placement
Most property management companies will charge a leasing fee, or a tenant placement fee. This covers the cost of preparing your rental home for the market. It also covers the costs associated with marketing your property, collecting applications, screening your tenant, and executing the lease. Property managers should earn the leasing fee you pay by renting your home quickly to an excellent tenant. Vacancies are expensive, so when you pay your leasing fee, you want to make sure your property is going to be rented as quickly as possible. You also want to make sure a well-qualified tenant is installed in your home, so your management company’s screening process should include:
The amount of your leasing fee will depend on your management company’s fee structure. Some companies will charge a flat fee; you’ll pay anywhere from $100 to $1,000 in a leasing fee. Other companies will charge a percentage of the first month’s rent, so you might pay 20 percent of the first month’s rent up to a full 100 percent of the rent.
Monthly Management Fees in Manhattan Beach
The leasing fee is a one-time charge, and then you’ll pay a monthly management fee. Similar to the leasing fee, the management company you work with will either charge a flat fee every month or you’ll pay a percentage of the rent that is earned. So, if your property brings in $3,500 in rent every month and your management company charges a 10 percent management fee, you’ll pay $350 per month.
The management fee should cover all of the day-to-day activities associated with the effective management of your rental property. This includes:
Before you hire a property management company, discuss what’s included in your management fee. Ask to see a copy of the management agreement so you know what’s included and what might be extra.
Additional and Hidden Fees
Some management companies will only charge leasing and management fees, and other companies will have additional costs. You might have an administrative fee or an advertising fee. There may be a technology fee or a charge for generating accounting statements or legal notices. Some companies will charge an extra fee for maintenance, which will be added to your invoice. Your $200 plumbing invoice may include a five percent upcharge, and your total invoice would be $210.
Additional fees are acceptable as long as you know about them. You need transparency and honesty from your management company. Don’t tolerate surprises in your monthly statement.
When you’re comparing property management companies, make sure you’re not just comparing costs. The real value comes in the services you receive and the expertise, tools, and resources that are provided by your property manager.
If you have any questions about the fees associated with rental management or you’d like help with Manhattan Beach property management, please contact us at South Bay Property Management Pros. We’d be happy to tell you more.