Rental Property Management Fees

Managing a property on your own can be a largely time-consuming job. If it's a rental property, then the scale of management is even higher and more complex. Recognizing this need of property owners, professional property management companies were created.

They offer a complete rental property or residential property management solution for property owners. If you are the owner of a residential or rental property, thinking of outsourcing the management job to a professional company, read to know the breakdown of management fees charged by such companies.

There are hundreds of things that need to be handled, when it comes to managing a rental property. You could either hire a company to manage the affairs of your property, or opt for a rental property management software, that makes your job easier.

While a professionally managed firm's services will cost you more, a property management software will cost a lot lesser. Let us now proceed further and see what are the factors that decide these fees.

While hiring a personal property manager may seem like a more convenient solution, professional firms are in a better position to do the job for you. They handle everything from advertising for your property, finding tenants, signing lease agreements, handling rental accounts, maintenance jobs to creation of lease renewal agreements.

Firms may offer to do some or all of these jobs for you. Depending on the number of property affairs that they handle, the fees charged will be higher. Here is an analysis of the fees that you can expect to be charged with.

One of the sizable parts of the fees is the money you pay the firm as commission. These fees are generally charged as a percentage of rent collected from your property. It may vary widely from as low as 3% to more than 15%.

Some property management firms will ask for a fixed amount of commission, irrespective of the rent earnings. This fee will depend on the size of rental property being managed and may be anything upwards of $200 a month.

To find tenants for your rental property, the firm will incur some additional cost, that will be added to the property management fees that you pay. This advertising cost will depend on the kind of media used for the purpose.

The legal aspects of rental management will include setting up of a lease agreement and even renewing the same when it has lapsed. The cost incurred in creation of these agreements through legal channels will add to the property management fees.

Property management firms also carry out maintenance jobs for you and they will charge an extra commission for every such job executed. You will have to pay for the maintenance job plus their additional charge for handling the job for you.

For a better estimate, you will have to directly contact a property management company, which provides you a detailed analysis of the services and fees they charge. While personal management of property is more cheaper, the charges for professional management are certainly reasonable considering they save your time and energy spent in managing the affairs.