When you're looking to invest in a new property, it's easy to be overwhelmed by the prospect of all that needs your attention. Contracts and property management fees can seem daunting at first glance if this is something you've never done before.
It can be frustrating to find out what property management costs per month. It's not always an easy number to figure out, as it varies for each person and the type of property they manage. In this article, we'll cover some of the aspects that go into figuring out how much you're going to spend on your monthly property management fees so you have a better understanding of what is involved. This will help make decisions about managing your own properties or hiring someone else easier for you!
So what are the things to consider to get an idea of how much project management fees will cost you if you are looking to hire someone to help you manage your property?
Property managers are a necessity for buildings that have multiple tenants. Property management businesses charge fees in one of two ways: as a percentage of rent collected, or fixed monthly fee.
Property management rates vary by company, but the majority charge between 8% and 12%. For example, if your home rents for $1,500 per month then a 10% property management fee would cost you about $150.
The average annual percentage charged in rent is an important consideration when looking at potential properties to purchase.
Vacant properties are a nuisance for management companies. When an apartment stays open, the company is still responsible for upkeep and inspections even if they don't have anyone to pay their rental fees. This can be costly over time as it takes more labor from them with no revenue coming in either way. Vacant apartments often come at a cost of monthly checks or set fee that's equal to what would normally go towards rent until someone new moves in but how do you know when your property will finally get some action?
Vacancy creates many problems for real estate managers who maintain vacant houses while waiting on potential tenants; empty homes require extra work such as regular inspection by security guards due to uninvited guests like squatters looking out of a shelter.
Many property management businesses provide flat fee structures for their services. A set cost is usually determined by the kind of property and may range from $100 per month to upwards of several thousand a year depending on which company you choose. While this type may seem like it's better at first, companies that get paid in advance might not be as invested in optimizing your rental income because they are guaranteed payment regardless of performance or what happens with the building over time.
For putting renters in your home, property managers might charge an additional fee. This can be either a one-time payment or a percentage of the rent and is usually half to full month's worth. This includes:
Evicting tenants is never an easy task. But, if you want to save time and hassle on the back end of your business operations, it may be worth paying for a property manager who can handle evictions quickly and efficiently at a fraction of the cost.
If you're looking to break your contract with a property management company, don't do it without taking these things into consideration. The fee for early termination will vary depending on the conditions of your contract but may only be one month's worth of additional costs or could lead to legal action against you because breaching contracts is illegal in most cases and can result in steep fines if not handled correctly.
We hope this article helps you figure out how much your property management costs per month are. If you're looking for a way to manage your own properties, or if you want to know what type of monthly fees you'll be paying when hiring someone else, we can help!
The top real estate agency in Northern California, Sexton Group Real Estate | Property Management in Berkeley, California is a boutique real estate company specializing in residential sales for properties throughout the San Francisco Bay Area. To better serve our clients we have three local offices, one in the heart of picturesque Berkeley, one near downtown Oakland and the third in the heart of historic Lafayette, California. The Sexton Group encompasses the essence of Berkeley’s charm, Oakland’s history and Lafayette’s family-oriented vibe all with a relaxed, down-to-earth nature. We are an amazing group of real estate agents whose wealth of experience spans more than 25 years in the industry. Looking to buy a home in Contra Costa or Alameda County? Contact us today for your free consultation!