The number one question people ask us when they call to talk about management is: how much does it cost? There is a lot involved in determining the cost of property management. There’s also a wide range of prices for property management because each company has its own pricing schedule.
Fees and Costs
Most monthly management fees normally run from between six percent and 10 percent of the monthly rental rate. When you hear that rate, you need to ask some questions. It’s important to know if there are other charges involved. A company that charges 10 percent, for example, might not charge anything else because it’s all included. A company that only charges six percent might also have a leasing fee, a fee on top of regular maintenance costs or an additional fee for lease renewals. So when you add up those additional charges, it might be more expensive on a monthly or yearly basis than the company charging 10 percent. Make sure you’re always comparing apples to apples. What appears to be a lower cost isn’t necessarily the best price.
Don’t ever choose the lowest cost vendors and assume all things are equal. They aren’t. The true question you should be asking is: what is the cost of not choosing a good property manager? There can be a lot of costs such as unhappy tenants, unqualified tenants living in the home, late monthly rental payments, evictions and poor quality maintenance. Most of all, not choosing the best property manager could create a higher possibility of lawsuits. So, when you think about the consequences of bad property management, the cost of these services is actually minimal.
Protecting Your Investment
Price should not be the major factor when you’re looking for professional management. When you really look at the price difference between a company charging eight percent per month and a company charging 10 percent per month, the expenses don’t change much. If the rental rate is $1500 per month, the difference in two percent is about $30. Your rental property is one of your largest investments. Most of the homes we manage are worth between $125,000 and $450,000. That’s a huge investment, so you don’t want the extra $30 per month, or one dollar per day, to be the deciding factor in the property management company you choose. Work with the best so your investment is protected.
If you have any questions about the cost of property management and what to look for, please contact us at DeGuire Paperless Property Management.