For landlords and real estate investors, hiring a property manager is often a wise investment. In particular, when someone else is there to handle the day to day nitty gritty work, it frees them up to focus on other, more revenue-driving initiatives. Of course, delegating this work to someone else comes at a cost. Whether you’re a landlord considering the help of a property manager, or you’re interested in getting into the industry and are curious, here are some of the common fees you can expect.
Some property managers assess a one-time fee for getting set up with them. This onboarding or setup fee typically covers the costs associated with filling out and filing the necessary paperwork, the initial inspection of the property or properties and a detailed review of your portfolio’s books. Onboarding fees are generally under $500, but you should inquire about it in advance so there are no surprises.
Pretty much all property managers will charge what’s called a leasing fee. This fee is to cover the costs of advertising, screening prospective tenants and filling vacant units. The amount assessed will vary, but generally speaking, a property manager will charge anywhere from half a month’s rent to a full month’s rent. Some property management companies also assess a fee any time an existing lease is renewed, so be aware.
Monthly Management Fees
If you choose to have your property manager handle rent collection, he or she may assess an additional monthly fee for this service. It’s typically a percentage of the monthly rent amount – usually around 10%. This fee may also cover additional ongoing activities, such as communicating with tenants, conducting inspections and performing emergency repairs.
When property managers are tasked with managing and overseeing the condition of your properties, there is sometimes an additional maintenance fee involved. If you are a landlord, be aware of what is included in this fee, as unscrupulous property managers sometimes try to pad their pockets. Likewise, if you are an aspiring property manager, make sure you are being fair and honest with the fees you’re charging.
Filing an eviction is a complicated process. This is when it’s great to have an experienced property management professional in your corner. Understand, of course, that there may be additional compensation expected for the extra work involved. You should also note that eviction fees are not typically inclusive of any court costs or other legal expenses, so be prepared.
These are the most common fees associated with property management. Landlords and property owners should take note, most of these fees are negotiable. As such, it may be worth sitting down and finding some middle ground. At the end of the day, the goal is to develop a long-term, trustworthy relationship that both parties can benefit from.