When looking for property management in Los Angeles, one factor you’ll consider is cost. And when asking property managers how much they charge, remember that you want to compare services as well as costs. So, how much does property management cost in Los Angeles, CA? To start, let’s just consider how much it saves you to choose someone that charges less. Get ready. If you own, say, a single home, you might not going save much by picking the lowest-priced provider. Check out the numbers. And feel free to plug in your own rent to check the exact amount.
You might be surprised how small the difference is between a 1% or 2% price variation.
Let’s say that you own a single home, and your rent is $2,500 per month.
If you’re picking someone because they charge 1% less, that difference is only $288 over the course of one year.
To check the math here, simply take $2,500 and multiply by 12 months, and then figure a 2% difference.
$2,400 x 12 = $28,800. This is the rent that will be collected in an entire year for your home.
2% of this amount is just $576 over the course of a year.
If your property rents for more, then you might want to adjust up. For example, even if your property rents for $4,000, a price difference between managers that is just 1% is a $480.
The logic: Find someone that will manage your property expertly, and professionally. They’ll more than make up a $300 or $500 price differential in collecting higher rents, minimizing wear and tear on your property, making your investment life peaceful, etc.
Choosing the company with the lowest price in town might actually cost you more money. Especially if they have hidden fees, fail to realize the full market potential in the form of higher rents, or charge you higher rates for repairs, which all properties will need sooner or later.
How Much Does Property Management Cost?
The cost of property management depends on the company you choose to work with and the portfolio of properties you have. If you own several homes or apartments, you will likely pay less than a landlord with just one property. If you have a mix of commercial and residential units, you’ll probably pay different fees for each, or the company you’re shopping may come up with one price for all your rentals, regardless of type.
What different prices should I compare?
Two easily comparable fees: the percentage of rent charged to manage the property, and any fee a manager charges for filling a vacancy.
A leasing fee covers the cost of marketing your property, showing it to prospective tenants, screening tenants, and placing a qualified renter into the home or building. This is usually a one-time fee. You may want to confirm that your management company doesn’t charge you another fee if your tenant stays longer than a year, or renews their lease.
What is the basic benefit a landlord can expect from Property Management?
Property management provides landlords and investors with all the experience they’ve gained over the years or decades that they’ve been in business. A good manager will bring you more income, value, and savings than they charge you. Meaning if you’re paying 8% in management fees, they should help your bottom line at least that amount.
Simply put, when you think about the cost of property management, remember that with a good property manager, you actually should earn more money than you would on your own. Property managers will keep you compliant with all rules and regulations, maximize rent collected on your property, and place responsible, long-term tenants who will preserve the condition of your asset. When you’re asking yourself whether you can afford property management, the real question should be ‘Can you afford not to have a professional managing your investment?’
If you have any questions about property management costs or how we can help, please contact us at Los Angeles Property Management Group.