Like the rest of the country, the rental property business has been booming in Utah for the last few years. And it shows no signs of slowing.
But all the responsibilities of property upkeep and finding reliable renters can be a major headache. That is why a lot of people seek a property management company to handle these responsibilities.
The costs associated with these services vary and depend on a range of factors. But once you understand which ones impact these costs, you can begin looking for the right company to meet your property management needs.
If you are an owner or real estate investor in need of property management services, keep reading. This article lays out all the advantages as well as what to expect when getting starting, including typical application fees.
Property Management Fees
There are several different types and structures of fees a property manager may charge. Here are a few of the most common ones you might encounter.
Property management companies often charge an initial fee to set up an account for new property owners. This is usually a nominal charge that helps cover their costs. These include inspecting the condition of the unit and gathering basic information about your rental goals.
Basic Management Fees
A typical property management company will charge a monthly fee for the basic services they provide. These usually include things like basic property upkeep.
There could be a flat fee or a percentage of the rental income. These generally fall between 4 and 10 percent.
The size and condition of the property, as well as property type, could factor into the amount of property management fees. For example, multi-family dwellings and commercial properties will have a different fee structure than single-family homes.
For smaller properties, companies may charge a lower base fee or a higher percentage (to cover their basic services even though rent is lower). Newer properties that are likely to rent faster and demand less upkeep may have lower monthly fees than older ones.
Basic management fees could include property maintenance, but often these services are add-ons. These include things like grounds upkeep, such as grass mowing, garbage pickup, or snow and leaf removal.
Property repairs are almost always separate from general maintenance and upkeep. Reputable companies will spell out exactly how repairs should be handled and paid for from the outset. For instance, they may need your authorization but then deduct the amount from rent collection.
Rental and Tenant Placement Fees
Many property management companies provide rent collection services. This alleviates the hassle of obtaining payments and associated bookkeeping.
Be sure to distinguish between “rent due” and “rent collection.” With the latter, the company handles collecting rent from tenants. "Rent due” usually means the company will notify the tenant of the amount owed but is not responsible for collecting payment.
Some property managers will handle marketing the property for you. This includes advertising costs and identifying prospective renters. It also might involve screening tenets, handling move-in procedures, and finalizing lease agreements.
Other fees to ask about include vacancy and eviction costs. Vacancy fees are often a set amount, typically around one month’s rent. It helps cover costs associated with management even if there is no rent coming in.
Eviction fees are for property management companies that handle evictions on your behalf. These too could be a base rate or a percentage plus associated court costs. The important thing is to know about these contingency fees upfront
Find a Property Management Company Near You
Now that you know what to expect when it comes to property management company costs, you can decide if it is the right move for your real estate business. It can be a great option for avoiding the headaches associated with rentals while providing a better experience for your tenants.
Maxfield Property Management is the only certified residential management company in Utah. We provide everything from leasing and marketing services to rent collection and asset management. Reach out to us today for pricing or to learn more about our services.