If you are thinking about using a property manager, then you need to make sure you understand the various rental property management fees. More importantly, before you ever sign a contract with a management company make sure you read through and understand each fee listed in the contract. If you are not careful you can wind up paying for management fees that don’t make sense which can eat into your profits.
There are legitimate reasons for various fees involved when working with a property manager. After all, just like you're in business to make money from renting your property, the management company provides a valuable service and should be compensated fairly. Below is an outline of some of the fees.
The primary fee that you will pay to your management company involves the service of managing the property. Typically you can expect to pay from 4% - 12% of the monthly rent paid by the tenant. The number of properties they manage, the location, the distance, and what services are included will all impact your fee.
Some companies will include itemized fees for the various services that add up to your overall management fee. Others will simply have a price. Regardless you want to compare apples to apples, so be sure that you get a full and complete listing of the actual items included in the service. Then you can compare the two equally. If the service is included by one company in the management fee, but as a separate item by another company, you will need to factor in the extra cost to compare.
GSR Property Managers charges a flat fee for our property management services of $100 per month.
Advertising fees are one of those fees that is sometimes included in the management fee. But once again, some companies will keep it as a separate item. If this fee is separate it will likely start at $100 and may go up from there. Like all fees, be sure to compare from company to company.
Leasing fees compensate the manager for the time, cost and effort to secure a new tenant. It also might include costs for financial and background checks to verify that the tenant is a good risk.
When a tenant renews their lease it typically does not require much work beyond the manager preparing and executing the lease. Any fee associated with renewals likely should not exceed$200, and if it does then it's probably a red flag.
Evictions are a hassle for both the landlord and the property manager. There are several legal steps to follow. The property manager will serve the eviction notice, engage and work with an attorney to represent your interests, pay for the attorney to make court appearances and more. While an attorney is not always required, you should balance the cost versus the risk. Be sure to ask the property management company what the fees would be with and without an attorney. Hourly rates will run between $25 to $60. If there is a flat fee for an eviction, you can expect to pay around $750 plus court costs.
These are just some of the types of rental property management fees that you will encounter working with a property management company. Fees will vary from company to company and depending upon where your rental properties are located. Understanding and comparing the various fees is time-consuming but extremely important. Make a mistake here and it will take dollars out of your pocket every month.
GSR Property Managers assists property owners in maximizing revenue potential while minimizing the hassles of managing their properties. There are a lot of factors that go into making a property a successful investment. Call us at 404-254-4502 or complete our Fast Form to learn more about our services.