While property management companies have various fees based upon a property’s type, location and the level of services needed, there are a few industry fees that homeowners should prepare for if they hire such a company. Here are a few common fees of management companies explained.
Standard Fee Agreements for Property Management
Most property management companies charge a percentage of the monthly rental fee typically between 8-12% as a standard rate for their services. Some firms may only charge a flat monthly rate, but this is rare. However, the monthly percentage or fees paid go towards good use concerning tenants, property maintenance and other issues that arise along the way.
Here are some ways property managers utilize funds in addition to supplemental fees that may be incurred from time to time.
New Tenant Placements: Securing a new tenant often costs money that a management company will need to recompense. Such expenses often include hiring a real estate agent to advertise and show the property to prospective tenants. Potential renters will need to be screened, fill out an application and sign a lease all things that require time and money.
Home and Property Maintenance: Property maintenance companies often hire their own crews or companies to handle multiple properties both residential and commercial.
They may ask for a set fee for exterior maintenance such as landscaping and charge rates in accordance with their providers for any interior repairs that may need navigating during or between tenancies. These fees are in addition to the standard fee agreement.
Fines, Fees and Evictions: Late fees and fines for violating lease terms require the management company to send out a fine notice and/or could ultimately result in an eviction. Both processes can be tedious and time consuming, so firms may ask to keep half of late fees for such services.
Evictions are even more of a hassle and average between $300-500 to start and can result in more fees to enforce in cases of resistant tenants.