Some property management companies will also charge what is called a lease up fee. This is also referred to as a tenant placement fee. It’s the cost of getting your property advertised, applications filled out and tenants thoroughly screened. This fee is usually a portion of the first month’s rent. The property management company might take a management fee that month in addition to the lease up fee, or they might only charge the management fee on any rents that are collected after a tenant has signed a lease and moved into your property.
Find out if the property management company you are planning to work with charges other fees in addition to the management and lease up costs. Some property managers will charge for the services they provide in scheduling and overseeing any maintenance and repairs that come up. For example, if you have a handyman out to the property to make a minor repair and the bill is $100; your property manager might add a percentage of that fee to your bill. Some property management companies also charge for administrative or clerical work. This might include charges for copying, faxing or scanning documents and pictures.
Always make sure you review your property management agreement before you sign the contract. You want to know what you are signing on to, and you also want to be sure you understand everything you are paying for. Ask if there is a discount for multiple properties. What you pay for the management of a duplex might be very different from what you would pay a property management company to take care of a 24-unit complex, for example.
If you have any questions on the costs of property management, please don’t hesitate to contact us at Jim McNeeley Real Estate.