What You Need To Know About Property Management Companies Fees
Property management companies act as a bridge between the tenants and you, so that you are assured of the best services and arrangements, and also a monthly income. There are various ways the property management company can serve you, the range is large. Right from a wide spread to everything included in one package at the end of the day. But remember, there are fees charged for almost each and everything at the end of the day. And to provide you with a role model for the fee structure is impossible. However, what we can do for you is educate you and make you aware on what property management companies charge and why they charge what they charge.
1. Commissions charged by property management companies
As an owner every month you would be charged a certain fee by the property management company, so that the operating costs and maintenance can be taken care of. Once again we would like to tell you that the fee varies from 3 percent to around fifteen, which is of the monthly gross rent. There are even some property management companies which would charge you a flat fee, which can range from as low as fifty dollars to two hundred dollars as well, per month. But all property management outfits would charge you a commission as a fee.
2. Setting up costs charged by property management companies
The reason they charge landlords this is to get a compensation for the time and resources invested in the project. This would also be for account setting up, for the property being shown to potential tenants, and other activities that would lead to managing the property at large. When the property manager finds you your first tenant he would charge you a “tenants fee”, this is deducted from the first rent the tenant pays. Some managers deduct this fee from the first monthly income or ask for it upfront. Remember, this fee can never be refunded to you, if all legal work and tenant procurement is done on the property. The fee once again would differ with different property management companies.
3. Fees for lease renewal
This is a fee which is charged by the property management companies to the owner when the current tenant renews the lease. All paperwork and communication fees would be taken care of by the property management company and sometimes the property manager would also call this fee as a year end inspection charge. It could be two hundred dollars or even higher and would be charged always, every time the lease is renewed and implemented, say experts.
4. Costs of advertising the property
This would depend on the contract signed between you and the property management companies. This means the advertising costs to show off your property to attract tenants would either have to be borne by you or the management company, in most cases it is the latter who would do the needful and they would charge you or split the costs for the same with you.
If you own multiple properties you can avail services of property management companies to take care of the paper work. Click on the links to find honest property management companies!
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