One of the most common questions that a homeowner will ask a property manager is: what are the fees? We’re talking about the cost of property management when you hire a professional company.
Property Management Upland: Management Fee
Basically, there are two types of fee structures. You will either pay a flat monthly management fee, or you’ll pay a percentage of the amount of rent that’s collected. Find out if the property manager you’re working with bills on a flat fee or a percentage.
Additional Property Management Fees
In addition to the monthly fee, there might also be a placement fee. Find out how much that is, and whether it’s a flat fee or a percentage of the first month’s rent. More importantly, ask if the company guarantees the tenant that they place. There could be a sign up fee, or a releasing fee at the end of the 12 month term. At that point, you will want to decide if you want to renew the lease with your tenant or just go month to month.
Some property managers charge an inspection fee. If the manager goes into the home during the first year of tenancy to do an interior inspection, you’ll need to be prepared for the expense. You might also run into a fee for notices; if the property manager has to serve or post a Three Day Notice to Pay or Quit, you could be charged. Ask about advertising and marketing fees, and what you’ll have to do to break your lease or end your contract.
Look for Hidden Fees
Be concerned about hidden fees that may not be clear. These will often include a vacancy fee, a work order fee, or the marking up of maintenance invoices. If you’re selling your home but a tenant is in place, you may need to pay to have the company manage the tenant throughout the sales process. This could lead to double payment – you’ve got the real estate commission fee plus the property management fee.