Property Management and Contract – How Much Should We Pay the Property Manager?
Property management firms are not a strange thing in the property world. On the other hand, the presence of a property manager would be a huge help for those who are looking for a home.
However, when it comes to the fee, we cannot give you the exact amount you should pay because it depends on how complex the engagement scope is. In the end, you need to ask yourself about how far do you want the property manager to work for you?
Typical Fee for a Property Management Firm
Generally, you need to pay the firm around 8 to 12 percent of the property’s monthly rental value along with its expenses. Some companies also give you a fixed rate per month like USD 100 or so.
This thing is not the best deal you may get. However, many property managers cost a small percent of the monthly rental payment in the first place.
Miscellaneous Fees for a Property Management Firm
In certain cases, the manager may show you some costs especially if he or she charges a low monthly percentage. This may include an annual inspection fee, advertising fee, and some reserve things. This will be used to anticipate the unexpected yet urgent expenses.
Other Possible Fees from a Property Management Firm
You may also expect some other possible fees. The Vacant Unit is the first on the list. Some companies may charge you one month’s rent. You may be charged with this fee if you try to engage the firm while the property itself is vacant.
Tenant Occupied Unit is another on the list. In this case, the firm will only charge you if the tenant is on the property. Meanwhile, if the property’s status is vacant, the firm may reduce the fee or even you do not need to pay at all.
Another possible fee is New Tenant Placement. This could happen if your property manager should get a tenant into a list. Terms and conditions might be applied so you better communicate well with your property management company.
Maintenance, Evictions, and Late Payments are also the reasons why you may be charged with an extra fee. Also, this is why the fee can be varied according to how you want to engage.
Property Management Firm – Things to Watch For
In this case, the contract language is essential. It is important to read the contract and agreement in the first place. Also, you need to find out how much you should pay the manager from the contract. There is a big difference between rent due, rental value, and rent collected. So, you need to make sure that your manager gets paid for what they are doing for you.
Having the best property manager could be a wise investment even if you need to pay for a little bit more. The presence of a manager should be enhancing the property’s value while also helping to retain the tenants. And this is everything you need to know about paying the property management firm.