Property management companies have the task of ensuring that the properties of their clients (landlords) are being managed and well-taken care of. All this is usually done at a reasonable fee. However, as a landlord new to the concept of a property manager, the question you would be faced with is determining how much property management companies charge for their services. Here’s a guide to help you out.
Factors That Determine The Fees
First of all, it is vital to know that property management companies do not set a fixed fee rate. Several factors influence the amount of money you may have to pay for their services. One factor is the size of your property. If your property is relatively large, managing it may take more work than on smaller-sized properties. Therefore, they would be more expensive.
Another factor is the extent of the services you would need from the property management company. Suppose you are hiring a property management company to collect rent. In that case, you would be required to pay a smaller fee than if you were expecting them to maintain your properties or oversee projects. The location and condition of the properties are also contributing factors.
Breakdown Of Property Management Company Fees
Now that you understand some of the factors that influence the fees charged by property management companies, you can look at the breakdown of these fees. Lanwayke Property Management aims to make your property investment as stress-free as possible and assist you on your path to financial independence.
Generally, property management companies receive fees in two main ways: a percentage of monthly rent or a flat monthly fee. These fees are influenced by the factors highlighted above.
- Percentage Of Monthly Rent
This is a relatively common way for property management companies to charge clients. Usually, property management companies would take a percentage between 8%-12% on the monthly rent you receive on your property. Suppose the property becomes vacant during a period of their employment. In that case, the property management companies will charge a fee equivalent to what would have been received had there been a new tenant.
- Fixed Or Flat Monthly Fee
For some property management companies, taking a fixed fee every month is preferable. For such companies, a fixed amount of money is charged for managing your property each month. The rate is usually influenced by the size of the property in question and the services required.
Additional Charges
Generally, property management companies do not create all-inclusive rates. Therefore, besides a fixed monthly rate or a percentage of monthly rental fees, there are other fees you may incur. If you are in Hervey Bay then must check Rental Property Hervey bay for better deals. Usually, fees include:
- An initial setup fee: This is a fee charged for your creating an account with the company. Every company may not charge this.
- Tenant placement fee: This fee includes costs of advertising, tenant screening, move-in procedures, and other services carried out to get tenants to your property.
- Maintenance fee: This is for services the property management service offers to keep your properties clean and in good condition.
With this guide, you should better understand property management charges and what to consider when hiring one.
