When you’re the owner of a rental property (or properties) you either hire a professional manager or you are the manager with all the responsibilities, liabilities and legalities.
When you hire a professional manager you can expect to pay a percentage of the monthly rents, leasing fees and other fees depending on the manager you hire. These monthly fees can range between 6-10 percent of your gross rents depending on how many rental units you own and volume of rent collected. The leasing fees can vary from a flat fee up to 75% of one months rent. Other fees that are usually passed on the owners are legal expenses when there is an eviction, then maintenance and repair costs.
However, when your thinking about management costs there are other factors to consider as well, such as; when you have a non paying tenant who does all communications and negotiations after finding out what the problem is, posting notices for non-payment or other lease violations, finding a good real estate attorney that will file the appropriate papers with the court, do court appearances and obtain judgements. Then, if you have to do an eviction, coordination with sheriff, hiring movers to move tenants belonging out of the property and dealing with the displaced tenants. Then the work begins when your rental is vacant, like how long will it take to do a turn over, how much will repairs cost, do you have the resources and contacts to get repairs done quickly, dealing with contractors, or doing the work yourself, then knowing how to properly deal with evicted tenants security deposit. All these things are part of management costs.
Management costs also include advertising vacant properties, fielding ad calls, showing your property, running credit/criminal/eviction reports, calling references, negotiating leases, making lease copies for tenants, doing move-in inspections, dealing with tenant questions/complaints, maintenance calls, vendor calls, making sure repairs are done, book keeping, banking and so on.
All these things are are part of the management costs and the reason many people don’t want to invest in real estate. These things are also what creates the horror stories. We all have heard or experienced them.
So, what does your property management really cost?
You decide the true value.
Performance Property Management handles properties throughout the Denver, Colorado metro areas. We handle all the details of property management for you so you can spend your time doing what you like doing best. With our team of professionals you can save time and money. To request a free property management quote just click here.