Determining Property Management Fees For Your Property by Graham McKenzie:
One of the most important decisions facing property owners owning a large amount of property is the selection of
a property management company. Ideally, you should obtain bids for the management of your properties from several
companies. This will allow you to compare each company's rates and services. Generally two payment options are
available to choose from: paying a monthly flat fee, or paying a monthly percentage fee. The lowest management
fee may not always be the best choice. Higher fees usually translate into more services. Also, management companies
with lower fees may have extra charges for necessary services like as advertising. Investors need to know if the
management company charges a fee for showing property to a potential client. Some management companies also charge
leasing fees in addition to their management fee. Investors need to read contracts closely to know exactly what
is included in the real estate management fee.
The real estate management fee is usually a minimum monthly base charge plus a percentage of collected income,
and the fees vary according to the type and size of the property. The charge for single family dwellings can range
from a flat rate to a percentage of the income, ranging from six to ten percent. Larger investment property is
most always charged by a percentage which is generally lower, generally around two percent. Fees are negotiated
by a number of factors that include the location, the size, and the condition of the property, and the total fee
can also include additional fees for leasing and other auxiliary services.
Since the property management fee is based on services provided, investors should be aware of all included services.
A regularly needed service is that of preparing the property for rent. Investors need to be aware of any fee that
the management company charges for the cleaning of vacant properties. Another service that is less regularly needed
is the eviction service, and many management companies charge additional fees for evictions. This charge may be
billed or deducted from the investors account on either a monthly or quarterly basis.
A management company performs many services for the investor. The company takes care of the daily activities of
renting the property, collecting rents, accounting and monthly statements, hires contractors for services such
as cleaning, hires groundskeepers and maintenance workers as well as supervises any work. The investor pays the
real estate management fees for peace of mind. When an investor has interviewed several companies and found the
fees are close in range with a few exceptions, he should then decide to further investigate each company's contracts
and references. By comparing all the services and getting good referrals, an investor can make an informed choice.
This interviewing process in the decision to select the most reliable and appropriate management company is only
the first step. The total fee charged is important, but investors need to know how efficiently and effectively
the company communicates with both the investor and the tenants of the rental property. Other important information
for the selection of a management company is how problems are addressed and resolved, how attentive the company
is to details in the leasing process, and how well the company maintains the property. All of these are important
factors in the selection of the best property management company.
Certainly there are other factors for you to consider outside of the fee that will be charged. For example, reliable
and quick handling of maintenance issues to prevent major expenses. A property management company should be able
to rent out your property faster than you alone due to the fact that they are working in the business every day.
About the Author:
Graham McKenzie is the content coordinator for a leading property management software review website which connects
people with the leading property management tools.
