If you are a first-time investor or not aware of valuable services provided by Property Management Company then property management fees might seem intimidating to you. But when you got to know about the different services offered by a property management team you will automatically realize that fees are reasonable. Now, you must be wondering, What are the services they cover and what property management fees to expect?
To help you understand what property management fees to expect and what services they provide we have taken a survey and consulted with property management specialists. And on the basis of that, we will explain the most common property manager charges, as well as what to look out for.
A setup fee is a very first and one-time fee that is usually only $300 or less. It is the cost of setting up your account with the company of property management London. Some may include an initial inspection to assess the current condition of the property to establish communication with the new property manager.
This is just a primary fee you have to pay each month. The valuable services they cover are day-to-day management of your property such as rent collection, communication with tenants, conducting property inspections regularly, manage repairs, and handle issues and emergency maintenance calls.
The management fee is usually a percentage of the entire collected rent, but some rental property managers charge a monthly flat fee. Most management companies charge 8-12% of the monthly rent as a management fee. The management fee also depends on the type of property. Property Management companies such as House Manage charge equal to or less than the market price. That’s why it’s the choice of various landlords.
- Leasing Fee
Most of the property managers charge a leasing fee (also known as the new tenant placement fee), which is the fee for leasing the property when it becomes vacant. It can be equal to month rent or some percentage of it (between 25-75%). The leasing fee is for the services provided by them that include the costs of advertising the property, showing it to tenants, screening applicants, prepare it for the lease, and for the move-in inspection.
“Don’t forget about the maintenance issues. You should be pre-prepared for and plan your budget accordingly. According to experts its a fact that annual maintenance costs average around 1.5 times the monthly rental rate. The Repairs and Improvement fee also depends on the age of the home.
Things to be kept in mind:
- Pay close attention to your property management agreement contract language. It should be stated in the contract that you will pay out of rent collected, not-rent due, scheduled rent, and rental value. The agreement should ensure that you will only pay a management fee when you’re receiving rental income.
- Whichever company you choose, make sure you understand what services will be covered in the management fee, what other fees you have to pay.
- Discuss with your property manager about maintenance services needed and pay accordingly.
As the property owner, you should understand all the necessary fee charges and services you are getting. We hope this Guide to common property management fees will help you make decisions and be prepared to hire property management services with confidence and fits your budget. For more information regarding property management fees and guidance, feel free to contact us.