One of the most popular questions we get from owners and investors who are thinking about using our services is: how much does it cost? As a rental property owner, you’re going to be concerned with the cost of professionally managing your home. Today, we’re discussing what kinds of property management fees you can expect in Birmingham, and how your property management company may collect them.
The first fee you will encounter when you hire a property management company is the leasing fee. This covers the cost of marketing and advertising your home, responding to tenant inquiries, and showing the property. It also allows your property manager to collect applications, conduct a thorough screening, and prepare all the necessary lease documents. Leasing fees are either a flat rate or a percentage of the first month’s rent.
The leasing fee is a one-time fee that you’ll pay when your property management company places a tenant. The management fee is ongoing, and you’ll pay it monthly. This is the cost associated with services such as rent collection, accounting, maintenance coordination, tenant relations, and lease enforcement. Like the leasing fee, a management company will either charge you one flat monthly fee, or you’ll be charged a percentage of the collected rent.
Additional Property Management Fees
The management fee and the leasing fee are the two most common expenses associated with professional property management. Depending on the company you choose to work with, there may be additional fees to expect. Some companies will charge an administrative fee or a set-up fee to get all your information loaded into their system. You might encounter a vacancy fee while your property is empty. Some property managers charge a lease renewal fee, and others will charge a mark-up on maintenance invoices. None of these fees are necessarily bad, as long as you’re aware of them. Make sure you’re working with a management company that’s transparent about all of its costs.
When you’re considering management fees, remember that they’re tax deductible. You should also keep in mind that the property manager charging the lowest fees isn’t necessarily delivering the best service. Measure value against cost, and choose a company with competitive rates and a lot of expert services.