If you are a landlord, you can manage your rental property in one of two ways. You can do it yourself or hire a company to do it for you.
In addition to maximizing your rental income and reducing your vacancy rate, hiring a property management company to take care of regular maintenance and repairs is a huge help. But how much does it cost to hire a property manager? The rates and fees charged by property management companies will be addressed below.
Property Management Fees
The first thing you need to realize about management fees is that they can be wildly different from one company to the next. However, property management companies mostly charge a national average of 5-12% of the monthly rent collected.
That’s a great jumping-off point, but it doesn’t give the whole story. That’s because you shouldn’t just look at how much it costs; instead, you should evaluate the value you’re getting from each company’s fees and services.
For numerous property managers, the fees they charge are used to cover the expenses of marketing and advertising for new tenants, collecting rent payments, conducting tenant screening and verification procedures, resolving tenant requests and concerns, organizing maintenance requests and repairs, carrying out regular inspections, granting legal paperwork such as leases and notices of violation, and dealing with other administrative duties. Although these and other services are typically provided by property management companies, it is important to check the particulars and ask plenty of questions before signing a contract.
Additional Fees to Consider
When factoring in the cost of a property management company, you need to remember that they may charge either a flat fee or a fee based on a percentage of rents collected – plus extra expenses for certain services. For illustration:
- Leasing and Tenant Placement Fees: This fee is a one-time payment equal to one month’s rent. Included in this cost are marketing your property, tenant assessments, and lease terms.
- Maintenance Fees: Everything from a dripping faucet to a blown roof might be covered by the maintenance cost. You should inquire with your management company how they assess maintenance fees and whether there is a cap on the amount they will ask for each fix.
- Tenant Late Payment Fees: If a tenant is late with their rent payment, the property management companies may impose a late payment fee. A late charge is often a percentage of the rent; however, this might vary widely from one landlord to the next.
- Advertising Fees: Costs associated with advertising include professional photographs for use in listings as well as the cost of advertising space in both digital and traditional media. Inquire about any additional advertising fees that may apply before signing any contracts.
Many owners are reluctant to hire a property manager to manage their rental property. Hiring a professional manager can be a good decision, mainly if you place a high value on your time. The advantages of engaging with an experienced manager can greatly outweigh the expenses, making it a financially sound choice in due course. A property management company will protect the value of your property and create a hassle-free rental experience. This is true whether you have one property or dozens.
If you’d like to learn more about the benefits of professional property management in Davis County or the surrounding area, Real Property Management Northern Utah is here for you. You may be able to convert your rental property into an income-generating venture with the help of our dedicated staff, extensive amenities, and established methods. Contact us online or call us right away! 801-546-1770
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