Property management groups offer everything from full-service management to little more than DIY home rental. But when you’re looking at percentage fees, how do you measure what’s fair?
What Is Full-Service Property Management?
To decide which fees are fair, you should first gain an understanding of what full-service property management means. Property management isn’t a one-size fits all service. Some landlords need help finding tenants, but they can do the day-to-day management on their own. Others can find their own tenants, but they need someone to draft the lease and answer late night maintenance calls.
On the other end of the spectrum, some landlords want a team to take care of all facets of management. That’s where a full-service management company comes in.
Relief From Day-to-Day Property Management Tasks
The main perk of a full-service manager is not having to deal with tedious landlord work, like responding to service requests and other resident issues. Full-service is the way to go if you don’t have the time or you prefer not to be bothered.
If you live over 15-miles away or out of the country, hiring a full-service property manager is also comforting. There’s someone who is there physically for marketing, emergencies or inspections since you can’t be around.
The hands-off approach works well if you own two or more rental properties. The manager can oversee each one, plus keep clean financial records to make sure you’re recording transactions for each investment separately.
Help Enforce Lease Terms With Residents
Another benefit of a full-service property manager is having them around to enforce the lease terms with residents. Managing personalities and making sure people follow your terms can be difficult. A manager acts as a buffer between you and your tenants to relieve you of the hassle and to make sure you enforce the lease legally.
For example, recently we got a late night call from one of our tenants about a squirrel in a toilet and another one when someone’s dog got bit by a snake. Instead of the owner having to deal with the issues, the calls came directly to us.
Residents often call with demands as well. Managers know what you’re responsible for and the tenant requests you can deny. If you have disgruntled residents, managers point to the black and white parts of the lease where the terms back up your decisions.
Ultimately, a full-service manager works for people who don’t have time or experience to manage the properties themselves.
How to Decide Which Property Management Fees Are Fair
When you try to gauge a fair property management price, make sure you’re comparing apples to apples. Full-service doesn’t mean the same thing for everyone, so here are some details to look out for.
When Does the Owner Need to Be Available?
Different companies may mean something different by “full-service.” One of our clients switched to us after working with a company that only notified him whenever something needed to be done. For example, if the utilities needed to be turned on, they called him and he called the utility company.
With LEAP’s full-service property management, the client never has to be physically present. We make all the phone calls, coordinate with vendors and tenants, and handle every aspect of the property. We only need the client’s approval to get things done.
What’s a Reasonable Property Management Fee?
Full-service fees range from 5-10%. As you compare property management rates, look to see what they include and if there are any additional costs. For us, our 7% fee includes everything – full management and peace of mind.
What Extra Fees Might a Company Include?
Sometimes property managers include fees for additional visits to the house. That means that any time a client needs someone to stop by the property for a service, there’s an extra charge.
When we got a call from a client whose alarm went off at his house, we went and turned it off without charging him extra. At LEAP, that’s included as part of the service. However, other companies often charge an inspection fee or a trip charge for any additional drive to the property.
A management fee should include any trip to the property: resetting alarms, moving trash cans, meeting inspectors. Make sure they won’t charge more for these inevitable visits.
Are There Set-Up Fees?
Set-up fees can range from about $100 to $300, depending on the condition of the property. If a house is vacant, the fee will usually be less than if it’s tenant-occupied.
It takes work to get a property ready to go. We hunt the keys down, make the transition from the old company, and send out your certified paperwork informing the new tenants where to pay rent and how to submit repairs. Sure, it takes time, but it’s included in our fee.
We believe the set-up should be included as a part of our full-service management. You don’t need any extra charges when you’re starting with a new company.
At LEAP, we work hard to earn your trust and we won’t sacrifice that for a few extra dollars. When we say you get full service for 7%, we mean it. If you’re interested in learning more about our full-service property management, give us a call for a quote.