Before you hire a property management company in Culver City, there are certain factors you need to consider. There are so many benefits that come with having a property manager take care of your property. However, before you make a decision to hand over your property to a management company, you should be aware of fees they charge and the services they render. You will also need to ask the property manager or the company to explain the fees involved.
Different companies have different fees based on the type of services they are providing you. However, don’t make your choice until you’ve compared the fees and the services to other property management companies in your area. This will give you an insight on how much you suppose to pay.
Below, we’ve explained some important fees that are charged by property management companies:
Commission
The first property management fee you should be aware of is the commission. When you hand over the management of your property to a company or a property manager, he will take the responsibility and get compensated for his effort by charging you a monthly fee. The Commission charged by property management companies can range anywhere from 3% to more than 15% of the monthly gross rent.
Alternatively, some property management companies may decide to charge you a flat monthly amount instead of a percentage. This amount can range anywhere from $50 to over $200 per month. Please note that every property management company charges commission.
Lease-up or Setup Fee
Among the property management fees charged by property managers is Lease-up of Setup fee. This covers the resources and time spent by the property manager in setting up an owners account, showing the property to potential tenants, and other activities that resulted in tenant placement. You can as well see this fee as “finder’s fee” for getting the tenant on your property. In some areas, the property manager will require you to pay this fee upfront.
In most cases, this fee is non-refundable once the property manager has started the process of placing a tenant in the property. Depending on who you are working with, this fee can vary from none to the first-month rent.
Lease Renewal Fee
Property management company will charge you a “Lease Renewal Fee” when a tenant renews his lease. The fee covers the cost of initiating paperwork or communication involved between the property management company and the tenant that leads to the renewal of the lease. This fee also covers a year-end property inspection by the property manager. Please note that Lease Renewal Fee can vary from none to about $200 or even higher.
Advertising Costs
Among the property management fees that are charged by property managers is the advertising cost and this shouldn’t come as a surprise to you. Depending on the company you are using, the advertising may be charged upfront by the company. Alternatively, the manager could split the costs with the landlord or cover the cost himself and add it to the lease-up or setup fee.
No matter how the company decides to go about the payment of advertising cost, make sure you keep an eye on them and find out what type of advertising or marketing of your property used by the company. Some fraudulent company may place your property in free online classified sites and try to charge you for it. You may need to talk to the third party when it comes knowing the actual cost of the advertising used by your property management company in Culver City.
Maintenance Mark-up Charges
Most landlords are not aware of this fee. Don’t be surprised if any property management company in Culver City tells you about this fee. This fee covers the cost of maintenance or repair works done on your property and initiated by your property managers. Note that the actual markup should be stated by the property management company as a percentage over the final invoice from the vendor. Here is how the markup works; if the contracts state you will incur 10% markup on all maintenance work, and the final cost of the maintenance is $400, the amount you will pay is the actual cost plus 10% of the actual cost which will give you $440. Please ask your property management company about this fee before making a commitment.
Conclusion
Don’t jump into the first attractive offer presented by a property manager. You need to first read the contract and ensure you understand it very well. If you don’t, ask for help or get the help of an attorney. You are allowed to ask a lot of questions. However, a reliable property management company in Culver City won’t have any problem answering your questions and they will also provide you with the best prices and services.
