3 Things Property Owners Need to Know about Property Management Fees
In our experience, property management fees generally range from 8% to 12% of gross rent income. While the more economical version is very tempting, property owners must be aware of what corners are being cut in order to achieve that lower pricing. The benefit of the higher fees is that they should be including a much higher value of services.
1. A lower base fee doesn’t always mean the cheapest option. While the base fee is important, it’s also not the complete picture. Separate fees can add up significantly. There can be extra fees for paying vendor invoices, leasing, and for onboarding new units. After paying all the extra fees, the total can quickly add up to a drastically higher payout than a company who requires a larger base fee but has fewer separate fees.
2. Higher base fees should pack a much higher value. Companies that require a payment of higher percentages should be giving you periodic financial reports, informing you as to how your asset is performing, answering tenant tickets quickly and efficiently, and overall should have a more hands-on approach. If your current company is charging you more but not including these services, it might be time to shop around.
3. A la carte plans are not always best. Most property owners end up hiring companies to manage their properties so that their income is more passive. When PM companies offer a la carte plans, it requires much more involvement from the owner, nullifying the goal of a more passive-income experience. It also makes it more difficult to keep track of how much you’re actually paying out to your PM Company at the end of the year.
Choosing a property management company that you can trust to care well for your properties and tenants can be intimidating, but we’re here to help. Light House prides itself on caring about people more than money and journeying with our clients to give them the best experience possible. For more information on obtaining our property management services, click on the button below.
