Having the luxury of owning a home and not having to do all the work and upkeep with it yourself sounds like a dream. Imagine, hiring a company that handles all aspects of ownership without owning. How could you not want to hire such a company if you rent out?
When it comes to hiring no doubt, you’ll have some reasonable questions to ask. The most important are the fees. What services are you being charged for as the owner?
Well, here are some of the fees that property management companies will charge.
These are changed directly to the owner of the property. That means you.
Its typically associated with the advertising and marketing of the property. Including the inspection, background checks, and paperwork. This will run you anywhere the entire first month’s rent. That means this fee could in fact be 100% of that first renter check.
- Monthly Management
You’d think being hired for their services that fees like that would just be included without having to be applied monthly. Well, like myself, we’re mistaken.
For providing property management services in Phoenix Arizona, as well as all over the country, these companies will be making sure the renter pay each month, processing said payment, doing routine inspections, and any maintenance work needed. Not to mention they also charge for emergencies services. Whether that is for maintenance or more serious events.
This sort of fee runs about 10% of the months’ rent. So, unless you have a new renter every month, this number should be on the lower side often.
You are still likely to pay for services even if you don’t even have a current occupant. That’s right folks, many property management companies will charge vacancy fees.
Typically, this will be a standard flat rate, but it can be, depending on the company, be a percentage based fee. Even if no rent is coming in.
- Late Fees
You may be able to avoid this one entirely depending on the contract that was agreed upon by the company and yourself. However, if a late payment is made for the rent, the company will charge a late fee for this untimely payment.
Now depending on the contract and the company, they can in fact charge to entire late fee to the client, or just a portion of the fee. They could require you to pay a portion or the entire fee yourself.
Often referred to as onboarding fees. But this is usually a fee from setting up the relationship between you and the company. Think of this as the “sign on the dotted line” fee. You’ll find in most cases that this is a one-time fee.
This is typically the payment you make after discussing the number of properties you need services for, and the number of units on those properties.
Eviction can be a very drawn out process. But you can’t hide from the fees that can build up from this. Depending if this matter goes to court, and in most cases, it does. The property management company will charge you for the time required to handle this matter on your behalf. You’re not done there.
You can also be charged a fee for their effort. Yes, their effort. They can charge you for the effort they use for this process. Interesting is it not?
These fees are the most common. If the tenant is a good occupant and has never had any problems with on-time payments or anything like that, they may wish to renew their agreement to rent again. This is great news for you. Having a reliable, good tenant is the dream for a renter.
So, having these renewal fees are not bad. It’s a flat fee you will be charged for by the company. In few cases, they will require an entire month’s rent as the fee. Almost treating a simple renewal as if it was a whole new leasing fee. Sneaky if you ask me.
The fees charged by the companies all differ. What one company charges may not be what other will charge. Even some of the services can differ drastically as well. These are some of the more common fees you’re most likely to stumble upon.