When it comes to the base monthly management fee, which typically covers regular services like handling rent collection, maintenance requests, and other tenant communications, local property management companies charge, on average, about 10% of the monthly rent value for a residential property. This residential property management fee smack in the middle of national industry averages, which put typical property management fees in the range of 8% to 12%.
Additionally, companies may charge a flat monthly rate rather than a percentage-based rate. That structure can sometimes provide a good value, but a low monthly rate can also be deceiving if it is accompanied with a gauntlet of hidden fees that add up to substantially more. It all depends on which property manager you choose to hire and what services they provide for their flat rate.
Kim Finch Real Estate charges 10% of gross rent.
What Do Residential Property Management Fees Cover?
At the end of the day, your property manager is being paid to ensure your property stays rented and is maintained. Additionally, they will evict disruptive or non-paying tenants. When it comes to specifics, however, services vary from company to company and based on the property management needs of individual clients.
It’s important to understand some of the common services offered by property managers and ask the right questions before choosing one to hire.
You also should ensure the firm possesses the knowledge and ability to successfully manage your particular type of property. Not every property management company has the right background and staff to meet the legal and physical needs of tenants and owners.
KIM FINCH REAL ESTATE HAS PROPERTY MANAGERS WHO EACH HAVE MORE THAN A DECADE OF RESIDENTIAL PROPERTY MANAGEMENT EXPERIENCE. We have managed properties in Utah, Salt Lake, Davis, Wasatch, and Summit counties. We know our market very well.
Common Property Management Company Fees
In addition to the base management fee, there are other property management costs that are fairly common. Depending on your property and the services you’re using, you may only be charged some of them. Here is a common property management fee breakdown:
1. Leasing Fee
The leasing fee is something property managers charge for finding and placing a suitable tenant in a vacant unit. This process usually includes services like running background checks, prior eviction searches, financial verification, and other tenant vetting services. Generally, the leasing fee is equal to about 50% of the first month’s rent, although some companies may charge as low as 25% or as high as an 100% of the first month’s rent.
KIM FINCH REAL ESTATE CHARGES ONLY $250 FOR EACH TENANT TURN AROUND.
2. Lease Renewal Fee
Property managers may charge a lease renewal fee each time the existing tenants renew their lease. The fee is used to help cover the additional costs required to update, modify, and process a new lease. It takes time for the property management company to communicate with the tenants about any market-based rent changes, prepare and collect new lease documentation, and handle other miscellaneous tasks. A typical lease renewal fee is about $150 to $200.
KIM FINCH REAL ESTATE DOES NOT CHARGE FOR THIS SERVICE.
3. Repair Funds
As with any inhabited space, regular maintenance and upkeep are vital. Management companies may ask property owners to provide reserve funds to cover the cost of minor maintenance and repairs. This way, managers don't need to contact you to get approval for each small repair. Your contract with the property management company should designate what constitutes a small repair, or how much the property management company can spend on a repair without first consulting you. Many management companies surcharge repair costs at 10-15% as compensation for arranging and scheduling repairs with outside vendors.
KIM FINCH REAL ESTATE DOES NOT SURCHARGE MAINTENANCE COSTS-- WE CHARGE WHAT IS BILLED ON THE INVOICE ONLY. WE WILL CONTACT YOU CONCERNING ALL REPAIRS AND REGULAR MAINTENANCE. WE BELIEVE IN OPEN COMMUNICATION AND NO SURPRISE EXPENSES WITH YOUR MONEY.
Be wary of Value-Added Property Management
Most importantly, if you’re considering hiring a property manager and you’re looking for the lowest fee out there, be wary of hidden fees that can come with those too-good-to-be-true, super-low rates. Unfortunately, sometimes less-reputable companies have these unethical practices in place, which can prove more of a headache than a help for you.
It’s Not Just a Property, It’s Your Property
Worried about the cost of hiring a property manager? The fees are worth the peace of mind knowing everything is under control when it comes to your real estate investment. A property manager can also get you more rental income for your property than you may be able to get yourself with extra amenities and an in-depth knowledge of the rental market.
AT KIM FINCH REAL ESTATE, YOU VAN RESDT ASSURED YOUR PROPERTY IS IN CARING, HONEST, AND EXPERIENCED HANDS. We fully realize that it's not just "another property" for which we are responsible-- it's YOUR property and we take it very seriously. We are committed to seeing that you get the most out of it.
PLEASE CONTACT DeAnne, our Rental Manager, for more personalized information. DeAnne@kimfinchrealestate.com
or the office phone at 801-228-8960