Owning rental properties can be a great source of income, but managing these properties can be time-consuming, overwhelming, and inconvenient. If you feel this way yet want to keep your rental properties, the best thing to do is hire a company to manage them for you. Property management companies offer all types of services related to the management of rental properties, and here is an explanation of how the fees typically work with these companies.
They typically charge a percentage
The most common method for calculating property management fees is through a percentage of monthly rental income. A company may charge between 8% to 12% (or higher) to take over the management duties of your properties, and the fee will vary depending on the company you hire and the duties you hire them to do. This method gives the management firm an incentive to keep all your units occupied, simply because they make money based on the amount of monthly rent they collect.
When there are vacant units, the company might not earn anything from these; however, some companies charge fees when there are vacancies. This is definitely something you should ask a company before you hire them.
Fees when leasing apartments
The company you hire might also charge a fee each time they rent a new apartment. When companies charge this type of fee, it is typically designed to cover all the advertising needed for finding tenants as well as all the paperwork required for each new tenant. There can be a lot of time spent looking for new tenants, and a large portion of this time is spent performing background checks and employment verifications.
What the fees cover
You can hire a property manager to take over every duty related to your rental properties, or you can hire them just to do certain tasks. It will cost more if you want them to handle every duty, which is why some property owners will continue taking care of certain duties instead of hiring a firm to do them.
Keep in mind that property management firms do an excellent job at maintaining rental properties and keeping the units filled. Because of this, you might see an increase in your revenues after hiring the company for help. You would also incur new expenses to have a firm run your properties, but doing so could actually be more profitable for you in the long run. To learn more about these services, contact a property management firm in your city. For more information, contact a business such as MacPherson's Property Management.Share
10 May 2017
Although I've never worked professionally in the real estate business, I sure know my way around it. How, do you ask? Well, I have simply rented a lot of different places and worked with a lot of different landlords and real estate agents. In the past 7 years I've lived in 11 different houses or apartments, none of them my own. In finding those 11, I have looked at literally hundreds of apartments. I used to hate house hunting, but now it's kind of fun. You just need to know what you want and the right questions to ask. Hopefully this blog can help you learn some of the tricks of the trade from another renter like yourself.