Why are property managers so in demand? It’s because the job of maintaining a property is quite hectic, difficult, and takes a lot of time. Property managers can be your angels in disguise, if you hire the right one. However, they can be costly, especially if you do not know how property managers structure their fees. Without that knowledge, you will not be able to pick the best out of the lot. Luckily, we’re here to help.
The Common Fees
Generally, you’ll find property managers in Burbank use at least one out of the three main categories below to structure their fees.
- Percentage of Monthly Rent
This is a pretty common way to charge landlords. Property managers charge a percentage of the monthly rent when a landlord employs them on a complete-service basis. The rate can range anywhere between 5-15%. Usually, managers will charge between 8 to 10% for single family homes and 3-10% (discounted) for multi- family units. The discount is dependent upon the size and range of income of the property. This fee structure implies that you do not have to pay if you have not rented your property.
A flat fee is a pricing structure where you have to pay a single fixed price for property management service. Whether you avail the service or not, you have to pay the money. This amount will not change with the amount of work done. Property managers tend to prefer this type of pricing structure when dealing with larger buildings. They mostly use this structure when they expect managing your property will require a significant amount of their resources.
As the name implies, it’s a combination of flat fee and percentage of monthly rent. Property managers charge a percentage for the monthly management. Other than that, they provide different value-added services which have fixed prices. So, you only have to spend more if you want to use them. Additional services can include lease-up fees, advertising fees and so on.
The Special Fees
Like any other service based industry, property management also have niche and unique services which require special knowledge. It includes the different services that property managers offer which are separate from the management fees. These additional services have varying fees attached to them. Some main ones are:
- Lease-up Fee
Wanting to fill a vacant property soon can incur a fee. The amount can be a flat fee, a portion of the lease term or a percentage of the first month’s rent. Typically, they charge a proportion of the first-month rent, and it is usually between 50 to 100%.
- New Account Fee
A new account fee is a set-up fee charged when establishing an account at a property management company. It covers the cost of transferring data from the homeowner or another property management company to the current property manager. Some companies perform inspections on the property, so this fee includes the work involved in it. The cost usually varies between $200-$500.
- Advertising Fee
This one is a bit self-explanatory. Some companies charge money for advertising. The fee is dependent upon the type of property, advertising requirements and frequency of the ads to be run.
- Eviction Fee
Property managers can sometimes charge a separate fee for serving an eviction notice or appearing in court. This fee is charged per hour most of the time and can vary between $20-$100.
- Maintenance Fee
Let’s face it, maintenance work on the property is unavoidable. Some companies tend to charge a percentage of the total cost of the maintenance. This is taken more seriously for repairs that are outside the domain of a regular plumber or handyman. The fee can go up to 10% of the total maintenance cost.
All in a day’s work
The lowdown on property manager’s fees is this: it all depends upon your property manager and how you want him/her to work for you. If you have a formal agreement specifying these things, you will not have to pay extra. Remember, you should always check and be aware of what you are paying for.