At first it may seem cost effective to manage your own home, but there are many unforeseen costs you may not know about or what to look for. Ultimately, hiring a property manager will minimize landlords overall costs and more importantly their time. Of course, this service isn’t a public service, so here are the fees to expect.
Be An Investor
It’s OK to acknowledge you don’t necessarily have the temperament or time to be a landlord. Your expertise handled finding a great investment property, now let the rental experts take care of everything else. It’s important to focus on your strengths and outsource your weaknesses.
The Universal Fees
Fees can differ between management companies, but there are some universal costs to expect. Always read rental property management terms and fees thoroughly. Specifically, keep your eye out for add-on or advertising material fees.
Set-up Costs
The first fee you encounter will be the set-up fee, covering the showing of the rental and/or placing tenants. It’s usually paid before the initial showing and is typically a percentage of first month’s rent.
Advertising
There are some free advertising platforms like Craigslist, but for the most part advertising comes at a cost. Sometimes this cost is included in the set-up fee or it’s given for free. If advertising isn’t included then negotiate it into your contract.
Property Maintenance Fees
Obviously wear and tear is something that comes with a house being lived in. When you work with property management professionals they usually have service professionals that give them a deal for partnering with them. With the discount for giving them volume business there will typically be a mark-up fee from 5-15%. Both of these combined may be the same price getting the service done your self.
Renewal Fee
Sometimes landlords don’t realize there’s renewal fees and feel blindsided when they are charged. Once again, always look at the fine print that explains all the conditions, or better yet ask. Usually the fee is related to annual inspections of the property the company has to do.
Cancellation Fees
If you have signed a contract with a property management company then there will most likely be a cancellation fee. If you feel like they are slipping up and not doing their job well then you may want to switch property managers.
Transparency Is Key
If you can find a property management company that is up front and gives you all the numbers then you are more likely to not be surprised down the line. Look for reports that verify the work they are doing and keep them accountable.
If the work is getting done and you as the investor don’t have to deal the landlord issues then you know you’ve found a great property management company.
Contact SOS Management & Property Services
Local: (858) 273-8800
