Collaborating with a property management company to represent your property is a big decision if you have rental property. While lots of owners handle their properties, using a management firm is an alternative technique to get rental income while saving burden and time. Consulting with a property manager does result in less revenue from your property due to owed management charges.
If you are thinking about employing a property manager or already working with one, looking into property management company fees is a good idea. There are numerous fees that can be included and added to property management obligations. Here are some typical property management fees that investors should expect to pay.
Types of Property Management Fees
Although property management costs refer to the amount charged for looking after rented property, property management companies charge the fees in different methods depending on their demands. A few of them are listed here:
1. Maintenance Fee
It primarily refers to investments made by the firm to keep your property in good condition. Generally, this fee is based on the terms and conditions set by the property management firm, like property management companies in Charlotte NC, and the property owner. If the landlord is responsible for the property’s maintenance, no charges are paid to the group; otherwise, the responsibility is placed on the team’s shoulders. The group pays based on the terms, conditions, and maintenance costs.
2. Monthly Management Fee
It is a self-explanatory term that refers to the monthly fee paid to a property management company for its services. This payment is made for the several services offered by the group, such as receiving rental properties management fees from tenants, frequent inspection of the property, property maintenance, dealing with renter issues during odd hours, and so on. This charge usually varies between 7% and 10% of the monthly rent collected from occupants.
3. Leasing Fee
This fee shows the time and energy invested in finding a renter, presenting them with the property, carrying out a background check and credit score check, and creating the lease and other legal papers. Usually, this one-time fee ranges from 75% to 100% of the first month’s rent.
4. Late Fee
Landlords or property managers charge late fees to renters who don’t pay their rent on schedule. If the tenant cannot pay the rent by the due date, the management company might choose to collect the total amount or a particular percent of the rent, depending on the mutually agreed-upon terms.
5. Eviction Fee
In many cases, the property owner may want to have his property vacated before the completion of the contract. In that case, the management firm can help him evict the occupants mostly through mutual agreement or court order. The property management firm can charge the necessary fees based on the work and time. To learn more about property management, you can check out Davidson property management services.
Remember that many property management fees are charged as a percentage and are determined by factors particular to your property, such as area, number of units, and expected work.
Bottom Line
Partnering with a property manager is an important decision for an investor. While you may be more than qualified, a property management company can sometimes make your company (and life) much more convenient. Evaluate the benefits and cons of employing a property manager, and be prepared to research what is ideal for you. Property management fees must be viewed as a small price for more time and less inconvenience with the best company.
