On our version of Landlord’s Corner, we are talking about one question that we get asked most frequently, which is: how much does property management cost? There are a couple of ways to address this. First, we’ll talk about the landlord’s cost of property management in Redmond, and then we’ll discuss the costs associated with having an inexperienced or poor property manager.
Property Management Costs: Leasing Fee
Property management companies typically break their charges in two sections. They charge for finding and placing a tenant; that’s called the leasing fee. It covers your marketing, showing the property to prospective tenants, screening those tenants, and executing lease-related documents. Then, the property manager oversees the tenant move-in. This can be a flat fee or sometimes it’s a percentage of the first month’s rent. We have seen a percentage that’s 50 percent or even 100 percent of that first month’s rent, or a flat fees of around $500. It really depends on the manager’s experience, ability to find a good tenant quickly, the resources available to the management company, and how often the property is being shown.
Property Management Costs: Management Fee
The second part of the property management charges are the ongoing management fees. This is also a percentage of the rent in most cases. We have also seen flat fees, and some management companies charge as little as $99 per month. That usually comes with a limited number of services or when a company is trying to manage as many properties as possible with as few team members as possible. What you pay depends on the level of service you’re looking for. You might pay a percentage of the rent that’s between 8 percent and 10 percent in the Redmond area. This fee covers all the ongoing aspects of managing your property, such as rent collection, 24-hour emergency services, all of the accounting, troubleshooting, and lease enforcement. Really, a good property manager is taking your place so you don’t have to worry about these details.
Property Management Costs: Inexperienced Property Managers
It’s important to consider the costs you can suffer if you hire a property management company with limited experience or a lack of interest in doing a good job. You need a good company that will keep your vacancy rates down. Every month that your property sits empty on the market, you lose 8 percent of your revenue. A good property manager will keep your costs in check while maintaining your valuable asset. So make sure you’re working with someone who is proactive, who works towards reducing liability and taking care of problems before they escalate.
These are the basic costs of property management. Do your due diligence and find a company that will help you receive as much rent as possible and maintain the property. If you have any questions about the cost of property management in Redmond, please contact us at SJA Property Management.