When you decide to get your own investment property rented out for the first time, you’ll find contracts and property management fees seriously intimidating. Although you’ve read several articles on how property management works or what fees are in its contingency per services, you still want to have the set price that a property management company will charge to manage your property. And with so much online feed info you’ve encountered, the majority of the answer says “it depends.”
Property Management Company cost depends on a number of factors. It varies widely, such as property-type, location, condition of the property (plus its size), and extent of services provided, and much of the total depends on the scope of the engagement. What do you want a property manager to do for you? Would you want them to do the full-service property management, partial or specific services to agree upon? Also read Why Is It So Hard To Cancel A Timeshare?
– One owner may only want to entrust certain tasks and functions to a property manager, while remaining very ‘hands-on’ in other areas. Another owner may want to take an almost complete ‘hands-off’ approach. Any arrangement a property owner makes with a property management company is one of delegation. –
COMMON PROPERTY MANAGER CHARGES
A property management company will help landlords manage their rental property for a price, and as a baseline, a typical residential property management firm charges between 8 – 12% of the monthly rental value of the property, plus expenses. If you don’t want to feel like you’re being nickeled-and-dimed each month with a list of confusing fees, here’s an inside gist of what sums up the services a property management company is really covering with:
Initial Setup Fee
Not all companies charge this fee, but if they do, it is usually $500 or less. It is an onboarding fee, which covers initial inspection on the condition of your property, or introductory communication to notify tenants that they will be managing the property.
Monthly Management Fee
This is the primary fee you’ll pay each month. The contract you sign with the property manager will specify how this fee is calculated and what services the fee includes. It may cover the day-to-day management of your property, such as collecting and processing rent, communicating with tenants, conducting annual property inspections, coordinating repairs, and responding to emergency maintenance calls. It is usually a percentage of the gross collected rents, but you’ll also find rental property managers who charge a monthly flat fee (a specific dollar amount that you pay the property manager each month). Some companies charge a higher monthly management fee, but it may be more inclusive, so do not be put off by a higher initial fee until you understand what is included in this fee.
TIP: Make sure your contract with the property manager states that the fee is for rent collected rather than rent due. Otherwise, the property manager will be collecting money even if the tenants are not paying their rent.
Reserve Repair Fund
This is a separate account that the landlord puts money in for necessary repairs on the property.
Leasing, and Lease-renewal fee/ Early Termination Fee
The fee covers the time it takes to make any adjustments to the lease or any unforeseen charges —including performing a Comparative Market Analysis to recommend rent changes (if any)—and obtain the tenant’s signature. It is typically around $200 or less. If the tenant is evicted or breaks the lease before the end of the one-year term, some property management firms will provide a full or prorated refund. You may only be responsible for paying one month of additional management fees or you could be taken to court for breach of contract.
Generally included as part of the monthly management fee. This could include keeping common areas clean, taking out garbage and snow and leaf removal. If a specific repair must be made, the cost of the repair will be deducted from the reserve repair fund, which was mentioned above.
A property management contract could include a fee for vacancies. This could be a one time fee of one month’s rent upfront or it could be a fee per vacant unit, such as $50 per unit.
Tenant Placement Fee
This includes advertising cost to find a tenant, tenant screening, move-in procedures, and preparing the lease agreement.
If you want a property manager to handle tenant evictions, you will have to pay for it. Expect to pay a few hundred dollars for each eviction, plus any associated court costs.
ORANGE COUNTY PROPERTIES
If you’re planning to buy a home or invest a property in Orange County, browse for the best property management in town and have your investment property on list at OC Property Rental guide! APG PROPERTIES have a team of property management experts which can surely aid you in managing your investment property – whether for your residential property or commercial! They provide full-service property management that’s a fast, reliable, and trustworthy job for years. They do not limit into specific locations in OC, instead they cover the whole OC area! They specialize in all rental types, Apartments, Town homes, Condos, Single-Family Homes, and more. You’ll definitely love to hear more of their offers.
BUYING PROPERTY IN GARDEN GROVE
Browsing for property managers to manage your investment property in Garden Grove? A professional property management firm may offer you lots of these. APG PROPERTIES have all rental property related services that absolutely fits your criterion. They only advertise on the most popular rental websites, organize only a thorough and strict tenant screening, post and create best quality grade photography – plus do attractive listings, provide full accounting and monthly statements, and research rent values of local competitive properties all to advance your investment property. They have the best known real estate portfolio of “Property Management Garden Grove” – which will mark your investment in advantage for sure.