If you own a rental property, having a professional property management company is a great way to ensure that your property runs smoothly and optimizes the return on your investment. There are plenty of benefits of hiring a property management company like making sure that tenants’ rent is collected on time and that potential tenants are vetted properly. Aside from this, you will also find this post helpful, especially if you want to consult and ask for help from the experts regarding class appraisal scope.
Any arrangement that a property owner makes with a property management company is based on delegation. When it comes to how much a property management company may cost, there is no set answer. Ooi Kee Liang explains that depending on which property management firm you go with and what tasks or responsibilities you delegate to them can cause variance in the cost.
Depending on the needs that you’ll need your property management to fulfill, whether it be hands-on or hands-off functions and tasks, the fees can be influenced by many factors. To get a reliable price quote for your property, see here how the experts conduct a fair property management appraisal.
How Much Does Property Management Cost?
As previously mentioned, there are different factors that can influence the price or fees associated with property management. One of the primary factors of the cost when retaining an airbnb property manager is the management fee.
The Typical Property Management Fee
Usually when you contract and bring on a management company, you can expect to pay a commission fee. This fee can vary from 6% to 12% of the rental value. But depending on the company you choose to go with may prefer to go with a flat rate insteal. This may be the case if the rental income is on the lower side, flat rate fees can range from $100 to $200 per month.
Rental Management Cost Breakdown
On top of the property management fee, most property management companies also charge additional fees for running and maintaining the premises. Some of these charges can include the following:
One way some property management companies attempt to keep maintenance costs on the lower end is by opting to work with various local repair companies and professionals to carry out regular repair orders for your tenants.
New tenant placement
Another fee some management companies might charge is for handing and setting a new tenant up with their leases. This fee is also known as leasing fees and can be equivalent to one month’s rent. The rate of this fee can be negotiated, but charging a leasing fee is standard in the industry.
In the property management industry, it’s important to always be aware that there are times when circumstances do not work out and even a once good, reliable tenant can become irresponsible and a liability. If a tenant has breached the terms of their lease and needs to be evicted, property managers can help with the legal process of acquiring court orders necessary to evict a troublesome tenant. This charge is usually between $500- $1000 per eviction.
The vacant unit charges
This kind of fee can heavily be contingent on the state of your property, whether it has empty units or not. If you have vacant units on your premise, you may be charged the equivalent of one month’s rent for expenses related to advertising and showing potential renters the unit. This fee would also include any costs associated with preparing lease paperwork.
Finally, one of the last costs that can be included is an extra cost that is designated for additional expenditures such as advertisements, inspection fee and any other unanticipated expenses or spending.
So what is the Average Property Management Fee?
Like we mentioned early, most property management companies fees can range from 6% to 12% of a unit’s rental value or occasionally depending on the management company they may choose to do their rates based on a flat monthly fee instead. Both options have their own unique benefits, the best way to find the best management company for you is to take into account their fees as well as the other services they offer.
In cases where you may be hiring a property management company to take over a multi-unit building or a group of several properties, the management company may charge one flat fee for the monthly management of those properties.
Whichever way the management company chooses to administer their fees whether it be a monthly percentage or a flat fee. There can be some variance and negotiation between you and your property management company on how much they’ll charge or what tasks and duties they’ll be responsible for. Now you have an idea and breakdown of how much a property management company charges and can cost.