A rental property owner should consider getting a professional real estate manager. This will facilitate seamless property management and optimum return on investment. Property management firms usually vet tenants and facilitate the timely collection of rent. The management firm will also maintain the property and make sure that it is always in top condition.
A rental management service is normally offered at a fee. The landlord should compare the fee with the revenue that the property generates. It is also important to remember that there are other costs such as repair expenses, land rates, and rental income tax.
This post carefully evaluates the real estate industry intending to answer the question: “What is the average rental management fee for properties?”
Why Do You Require a Property Manager?
Before exploring the average charges for managing properties, it makes sense to establish why this service is needed. When you select a top rated manager, he will enhance your property in the following ways:
1. Helping You to Obtain the best Tenants
As a landlord, the last thing that you want is a bad tenant. However, it is not easy to get a good tenant. Property managers have been in the industry for long. That makes them be well placed to find the best tenants for your properties. The best tenants stay longer, pay rent on time and will have fewer problems.
2. Fewer and Inexpensive Legal Issues
Landlords who have been renting houses for long can attest to the fact that it merely requires a troublesome tenant to face major legal and financial problems. However, property managers have dealt with these cases for long. Thus, they will help you to avoid entering into problems with the law through regular inspections, binding agreements, and thorough tenant screening.
3. Short Vacancy Cycles
A property manager will be able to fill vacant units in your property promptly. A real estate manager will harness his networks with other people in the industry to advertise vacant units. That will save you from incurring losses.
4. A Tighter Rent Collection Process
Anyone who owns rental property expects to have a smooth flow of income. This will only be possible by working with professional rental management firms. These have expertise in handling tenants and collecting rent. The whole affair starts with proper tenant screening to establish if a tenant is capable of paying rent on time.
What are the Average Rental Management Fees?
A number of factors influence property management fees. They include the level of property management involved, the man-hours used in managing the property, and the location of the property. The list below provides the average estimates that you should expect when contracting a property manager.
The Typical Rental Management Fee
When you contact a rental management firm, you should expect to pay a commission of 6% to 12% of the value of the rental property. This fee goes to the management firm. Some companies charge a flat fee of $100-$200 each month, especially when there is relatively low rental income.
Other Possible Charges to Expect
On top of the property management fee, there are additional charges that should be met by the landlord/ management firm.
- Maintenance charges: To minimize maintenance costs, some rental management firms usually contract a number of repair professionals to do regular repair works. In this case, you will need to pay a callout fee of $15 to $45 per person. The firm will also take into account the cost of materials. That will increase the cost of repairs.
- New tenant placement: Some rental management firms usually charge a fee for getting a tenant into a lease. This is normally 50% of the first month’s rent.
- Eviction charges: At times, things might not work as expected. A good tenant can become irresponsible. Such a tenant will have to be evicted. Property management firms charge between $200 and $500 per eviction. This cost is used in acquiring a court order for evicting a client.
- Vacant unit charges: Engaging a property manager when the premise is empty is likely to attract vacant unit charges. This is the value of one month’s rent. It used to cover expenses such as preparing a lease and the cost of placing advertisements.
- Miscellaneous fee: There can be additional expenses such as inspection fees and unanticipated spending.
- Property Management Fees: What are the Average Property Management Charges for Rental Properties?
If you are a Toronto landlord, the rental management company that you choose will determine how effectively your property will be managed. You should focus on the cost of service and the commitment of the selected firm.
The Property Management Price
Property Management companies are committed to low charges. That is the most outstanding thing about this firm. The management of this firm holds the view that the landlord or investor should enjoy maximum returns on investment.
Tenant placement without MLS is free of charge. However, for the case of tenant placement with MLS, there is a small fee of ½ a month’s rent and an additional $200 that caters for the MLS fee. This cost is small compared to the costs of other companies some of which charge a full month’s rent for every new tenant that is brought.
Move-in and move out inspections are completely free with many property managers. However, if a landlord uses another company for inspections, there will be a charge of between $75 and $200 when a tenant is moving in or out.
Spring and fall inspections are charged $99 by property managers. Other companies charge tenants up to $400 for these inspections.
Other charges you should be aware of include insurance charges starting from $150 and a $25 monthly charge for non-resident tax remittance.
Some of the free services at many property management companies include lease screening, online financial statements, pre-delivery inspection, granting access to tradespeople, and vacant house visits.
This wonderful article was written by Red Hawk Property Management Phoenix AZ: