A tenant springs a leak at 2:00am. The rent check is a month overdue. You have 4 people wanting to view your property all at different times. Renting out a house or apartment can be a sound investment, but can also bring a lot of hassle. A Property Management company can handle these headaches, however, choosing the wrong company can quickly drain much of your financial gain. Knowing what fees and charges you will incur is vital as management companies charge differently. Read our guide below for the most common types of management fee structures.
In this model you are actually “renting” the unit to the property management company and they pay you a monthly rental amount, regardless of whether the property is occupied or not. It is then up to the management company to rent the unit to an occupant at a higher rental rate; the management company keeps the difference. Although it is good to have guaranteed rental income, the amount is almost certain to be less than what you could get otherwise, so consider carefully.
In this structure, the rental company charges different fees for each of their services or activities. This can get pricey as fees can add up and may include:
Eviction fee- an added charge if the company must assist you with the eviction process On-boarding fee-an initial charge for simply signing up with a management company
Lease renewal fee-the company may charge you anywhere up to a full month’s rent for a lease renewal
Maintenance fee- a surcharge added to repair fees that the company charges you
Miscellaneous- there are countless other fees that a management company may tack on which include fees for: paying bills, late payments, lease violations, unpaid invoices, etc.
In this most common structure, the management company charges a flat rate each month for providing their services. This is a great option because you can anticipate and plan for what you will pay each month. This really pays off financially as well as in time savings, particularly if you have a problem tenant with constant issues because you will still pay the same amount. Be certain to check that there are no additional hidden costs as many management companies have a combination of percentage of collected rent as well as additional fees for certain services, such as new leases, etc.
Before signing any contract with a property management company be sure to research and think carefully about your best options. Read the contract carefully to make certain everything you think is covered is actually written in the contract. Taking the time to make a smart decision here can save you a lot of hassle and money in the future. If you would like to learn how Buy Sell Rent San Diego can help you with your property management needs, please call (619) 825-1974 today!