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  • Writer's pictureSeth Flora

How Much Does It Cost To Hire A Property Manager

Updated: Oct 22, 2023

The cost of hiring a property manager can vary widely depending on several factors, including the location of the property, the type of property, the services provided by the property manager, and the overall real estate market conditions. Here are some key points to consider:

How Much Does It Cost To Hire A Property Manager

Percentage of Rent

Property managers often charge a percentage of the monthly rent as their management fee. This fee typically falls within the range of 8% to 12%, though it can vary. The percentage may be influenced by factors such as the type of property, its location, and the comprehensive services provided by the property manager. Higher-end properties or those requiring more extensive management services may incur higher percentages.

Flat Fee

In contrast to the percentage-based fee, some property managers opt for a flat fee structure. This fixed amount is charged regardless of the monthly rent and is commonly applied to single-family homes or smaller properties. The specific flat fee can vary widely and is influenced by factors such as the geographic location of the property and the level of service offered by the property manager.

Leasing Fees

Property managers may assess a leasing fee when they successfully secure a new tenant for a property. This fee is typically calculated as a percentage of the first month's rent and compensates the property manager for tasks associated with the leasing process. This includes advertising the property, screening potential tenants, and facilitating the signing of the lease agreement.

Maintenance and Repairs

Beyond the management fee, property managers may charge for maintenance and repair services. The approach to these services varies, with some property management companies maintaining in-house maintenance teams while others contract out to external vendors. The cost for maintenance is typically additional to the management fee and depends on the extent and nature of the repairs needed.

Vacancy Fees

Some property managers implement vacancy fees, particularly during periods when the property is unoccupied. This fee is designed to cover expenses related to advertising the property, conducting showings for prospective tenants, and managing the leasing process. Not all property managers impose vacancy fees, so it's important to clarify this aspect in the management agreement.

Additional Fees

Property managers may apply supplementary fees for specific services. For instance:

Eviction Proceedings

Additional fees may be incurred if the property manager has to navigate the eviction process, covering legal procedures and court appearances.

Lease Renewal Fees

A fee might be charged for the renewal of a lease agreement with an existing tenant.

Administrative Fees

These could encompass tasks such as preparing financial reports or providing documentation for tax purposes. Understanding and clarifying these additional fees is crucial when evaluating a property management agreement.

In conclusion, hiring a property manager involves considering various factors that contribute to the overall cost of services. Property managers may charge a percentage of the monthly rent, a flat fee, leasing fees for finding new tenants, and additional fees for maintenance, vacancy, or specific services like eviction proceedings or lease renewals. The specific fee structure can vary widely based on factors such as the type and location of the property, the level of services provided, and the policies of the property management company.

It's crucial for property owners to thoroughly review and understand the terms outlined in the management agreement. Clear communication with the property manager is essential to ensure transparency regarding all fees and charges. Additionally, property owners should consider the value provided by the property manager in terms of time saved, potential rental income optimization, and the overall efficiency of property management.

Comparing the fee structures and services offered by different property management companies is advisable to make an informed decision based on the unique needs of the property and the owner's budget. Ultimately, while the cost of hiring a property manager is a significant consideration, it should be weighed against the potential benefits in terms of time, convenience, and the overall success of managing the property effectively.


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