Owning rental properties takes time, money and keeping up with local and state laws and ordinances. Property managers take care of every day management and collecting of rents as well as responding to tenant repairs, property maintenance , dealing with vendors, filling vacancies, making sure you get good quality tenants, handling problems and other tasks so you can devote your time to finding more good deals and increasing your long term wealth.
Benefits of Property Management
- Save you time and money
- Knowledgeable about your rental market and fair market rents
- Knowledgeable about national and local rental and housing laws to keep your property in compliance
- Screen tenants and find good quality tenants that stay awhile
- Maintain the property and coordinate repairs with vendors
- Help with evictions
They are available 24/7, answering emergency repair calls and solving other property issues. They screen new tenants, advertise your property for lease, show the property, do background and credit checks on prospective tenants, prepare leases and renewals, collect rents, and send you a check every month. In exchange they get paid a commission or fee.
Property Management Fees
Commercial property management fees vary between 4% to 12% of the monthly property rental income. For a single family home, fees range around 10% of the rental property income. Some companies offer a flat fee or a combination percentage and flat fee depending on the services they perform and the number of units in the building or complex. Fees are generally taken from owner rental accounts or billed monthly. Expect to pay a new account set up fee that ranges up to $300. This is a one-time fee. Some companies charge a leasing fee of 25% to 100% of the first month’s rent. You should interview at least three companies to find what services they perform and compare fees. Ask them how many employees they have and how long they have been in business as well.
Difference Between OnSite Manager and Management Company
An onsite manager is usually an individual or couple that resides at the property for a reduced rent and a salary to take care of the collection of rents, screening of tenants, renting of units and some maintenance duties. A management company has their own offices, has their own crew and a staff that takes care of most or all functions of managing your property. They may also have an office located at your property with leasing agents available to show vacant property and perform background checks and credit checks for prospective tenants.
Using a property management company is a good investment strategy that most successful investors follow. A good property management company will solve problems avoiding legal issues before they escalate into expensive litigation and help keep you out of court more often.
You have more time and freedom, and you know you can rely that someone is looking out for your rights and interests. Hiring a property management company should be incorporated into your business plan whether you own one rental property or multiple apartment units or commercial office buildings.
