Property Management Fees: How Much Should You Expect to Pay?

property management fees
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Are you looking for ways to make your investment property run as smoothly as possible?

Whether you own a whole apartment building or a single condo, it’s important to understand the work that goes into managing a rental property.

Hiring a property manager can help you mitigate some of that work.

Read on to learn all about the property management fees you should expect to pay to make the best choice for you!

Typical Property Management Fees

Property Management fees can vary based on the market and the value of the property.

Some rental property management companies charge a flat fee per month. Others will charge based on a percentage of the monthly rental payment.

As a starting point, expect fees to be somewhere between 8% to 12% of the monthly rental value.

Setup Fees

When you first engage a property manager, the first fee you come across might be a setup or onboarding fee.

This is a one-time fee that will cover the cost of setting up your account. It also might cover a property inspection to assess the condition.

Monthly Management Fee

The management fee is what you’ll pay to the property manager each month that you work with them.

It will cover day-to-day property management. This includes collecting rent, tenant relations, annual inspections, and taking emergency calls.

As mentioned above, many companies will charge based on a percentage of the gross rent collected.

When negotiating these fees, be sure to pay close attention to the contract language. Speak with a lawyer if you have any questions.

Leasing Fees

Most rental property managers have a fee for leasing and releasing the property if your home becomes vacant.

Leasing fees cover advertising costs, inspections, and the cost of screening prospective tenants.

You can expect this fee to be some percentage of one month’s rent.

Additionally, some management companies will charge a lease renewal fee for existing tenants that choose to stay. This fee is usually $200 or less and covers the cost of making any lease adjustments.

Other Fees to Consider

As you research the various property management fees, it’s important to consider other fees that might affect the viability of your investment.

For example, you’ll want to keep your maintenance budget in mind and plan to set aside rental income for that purpose.

Discuss with prospective property management companies how you would like to be notified about routine maintenance. A general rule of thumb is that you should budget 1 percent of the property value per year for maintenance fees.

Is Property Management Right For You?

Knowing about these property management fees and preparing for them will help you determine whether property management is right for your investment.

Proper budgeting is key to successful real estate investing, so be sure to keep these ideas in mind as you move forward with your investing journey!

Looking for property management solutions or a real estate agent to help? Contact us today and the eFind Agent team will be happy to answer your questions!

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