Property owners looking to effectively manage properties will always inevitably end up wondering if they should work with a property management company instead. As you add more properties to your portfolio—or invest in properties that can hold several different tenants—you will find that that managing everything can be fairly difficult. To know if working with a property management company is the right choice for your properties, you might be curious about how much they charge. In this article, we will explore how much you can expect to pay your property management company.
What You Get When You Invest in a Property Management Company
Investing in a property management company can help to lessen the burden that comes with managing your properties. These trusted partners can help you to get the most out of your investment while meeting tenant needs sooner rather than later.
Property Managers Offer These Services and More:
- Leasing and property tours
- Rent collection and payment processing
- General and emergency maintenance
- Tenant communications
- Marketing and advertisements
- Property inspections
The Cost of Working with a Property Management Company
Any time that you work with a property manager, you can expect to pay a fee. The cost of working with your chosen property management company will generally be dependent upon a variety of factors. These factors can keep the cost low or cause the price to increase depending on what you choose.
Rental Value
The rental value of a property is a key point of focus when determining the cost of this service. In general, the main fee associated with property management will be dependent upon the overall rental value of a unit.
Since the value plays a large role in the final cost, it is also important to consider how the number of units will play into this. Some companies will charge an overall price for a property with multiple units, but others will charge a percentage based on each unit and its earning potential.
Set Rates
When deciding on a fee for your property, companies will generally default to a set percentage of the rental value as part of their payment. On average, the majority of property management companies will charge between 5% and 15% for their services—a number which is applied to the rental value of the property or subsequent units.
Service Differences
Aside from the size of the property being managed, a big distinguishing factor when it comes to pricing is the services that you are paying for. Property management prices can vary significantly depending on the services that you need help with.
If you are working with a property manager purely to increase your occupancy or handle leasing, you will likely see a one-time fee. For example, we charge 100% of the tenant’s first month of rent for lease-only services.
As you add more services with your property manager, you can expect the rates to go up and the fees to become regular payments. For reference, we charge a combination of a percentage of your tenant’s first month’s rent in addition to a set percentage for the monthly management fee for ongoing services.