If you have a rental property, or are considering investing in one, you have likely considered hiring a property management company. The fees they charge vary, and depend on the duties they handle, how many units, and where the property is located.
Property management companies can oversee many day-to-day activities of owning a rental property, including:
A property management company can handle pretty much anything involving the maintenance, operation, and administration of a rental property. There are property management companies that specialize in both single-family and multi-family real estate.
Property management companies charge a base rate and sometimes also charge additional fees.
The base fee of a property management company is usually around 8% to 12% of the gross monthly rent. This amount might be higher or lower depending on the services provided, or if the property is in an expensive area. Some property management companies charge a flat monthly fee instead of a percentage.
There are two different types of percentage-based fees. The first is rent due, which means the percentage you pay is a percentage of all rent due that month, whether or not it has been paid. There is also a rent paid contract, where the amount paid is a percentage of the paid rental amounts.
Property management companies also usually charge an initial administrative fee when you sign a contract with them.
Besides the base fee, some property management companies charge additional fees. These fees can include:
If you decide to use a property management company, it is important to understand the contract fully and be aware of any additional costs and cancellation fees.