Key Takeaways
Property management costs typically include fees such as initial setup, monthly management, and tenant placement, with each covering essential services like rent collection, maintenance, and lease agreements.
Additional fees may apply for lease renewals, inspections, evictions, or vacancies, and it’s important to review a company’s service list to understand exactly what’s included.
While hiring a property manager comes with costs, their expertise helps reduce vacancies, secure reliable tenants, ensure legal compliance, and maximize
Anyone can own a rental property, but managing it isn’t always as easy as it seems!
Managing a rental property requires significant time, effort, and skill. Not to mention the dedication and thorough understanding of the responsibilities involved.
If you are just getting started or already have a full-time job, self-managing your property may not be an option. In such cases, hiring an experienced property management company would be the most sensible thing to do.
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Be that as it may, hiring a property management company does come with a cost. However, this cost will be nominal in comparison to the savings you make in the long run. In fact, a good property manager can help you not only save on stress and time, but also maximize your ROI.
But, just how much should you expect to pay in property management costs? This is the question that Richey Property Management aims to address in this blog. Keep reading to learn more.
What Are Some of the Different Fees That Property Managers Charge?
Initial Setup Fee
Just as the name suggests, this is the fee that goes towards setting up an account with a dedicated property manager. It covers things like paperwork and processes that are necessary to create an owner-manager working relationship.
Not all property management companies charge this fee, however.
Property Management Fee
A property management fee covers most of the services that property managers provide to rental owners. More often than not, it’s a percentage of the monthly rent collected.
The following are some of the services you can expect a property management fee to cover.
Collection of rent. Collecting rent can be stressful and time-consuming, especially when dealing with a difficult tenant. However, working with an experienced property manager can simplify the process.
Direct deposits to your bank account. After the property manager has collected the rent, they will then forward it to your account, less any charges.
Drafting a lease agreement. This needs to be detailed and legally compliant to ensure it prevents potential conflicts or misunderstandings. A property manager can help ensure it covers all important areas.
24/7 Maintenance assistance. Now and then, a tenant will call for repair or maintenance assistance. A property manager will ensure all requests are handled with the appropriate urgency, whether it’s during the daytime or the wee hours of the morning.
Property inspections. These are essential in ensuring a property continues to look its best. A property manager will assess the property’s condition and confirm that the tenant is abiding by all terms of the lease.
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Other services that a property management fee usually covers include utility coordination, year-end statements, record-keeping, and communication with tenants.
The best thing is that the best property management companies will usually list such services on their service pages for property owners to see. So, make sure to check this page to learn about the specific services the company offers. And if a company doesn’t have a service page, continue looking; that’s a red flag.
Tenant Placement Fee
This is another common fee that most property management companies charge rental property owners. The tenant placement fee, also known as a leasing fee, goes towards filling a vacancy.
In order to fill a vacancy, certain things have to be done. You need to ensure the property is rent-ready, prepare a listing, and market it broadly to a large prospective tenant pool. Working with a property manager can help eliminate any guesswork or mistakes during the process, and ensure minimal vacancy rates.
Tenant Selection
This is a big one, and for good reason! You see, the kind of tenant you rent to can make or break your efforts of being a successful rental investment owner.
Your focus should be on finding a tenant that will pay rent on time, every time, care for their rented premises, and report issues promptly, among other things. A good property manager will have a fair and proven process to help identify such a tenant.
Other Fees
In addition to the aforementioned fees, other fees that go into determining a property management cost include the following.
Lease renewal fees
Maintenance fees
Eviction fees
Annual inspection fees
Vacancy fees
Lease signing
Bottom Line
The specific cost to expect from a professional property management company will depend on various things, including your property’s size, type, and location. Hopefully this blog has helped clear up some of the confusion regarding what goes into determining the cost behind property management.
For specific figures, look no further than Richey Property Management. We can help handle all your property management concerns in Northern Virginia and the surrounding areas. Contact us to learn more!
