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In my area, they charge 10%, plus a fee for any repairs they arrange. In some locations, they charge a full month's rent each time they find you a new tenant.
A month's rent, advertising costs and 6 - 10% of monthly rental, and other fees like supervising maintenance people, etc. Where they get you, though, is by being able to call the shots on maintenance. The contract usually says something like they get to make decisions on maintenance and use who they want to do it, if they determine it's an emergency, or the amount of the repair is under a certain amount. Next thing you know, they're calling you for more reserve funds, and you had no idea they were spending it like mad without even calling you.
They will also charge you the same up front fees again, if the tenant gets kicked out or breaks the lease. These contracts really are scandalous.
Happened to my daughter.
If you do hire a manager, I suggest you write up your own contract and look for a realtor willing to do it. Say they must go through you for any expenditure approval, and they can only make an emergency decision if they can prove they tried to reach you first at all of your contact options. And I suggest you line up your own maintenance/repair people that they must use. I'd go for a higher monthly percentage of rent, but no additional fees like supervising maintenance people, etc.
They will also put in the contract that to break the contract, you have to pay them a month's rent in liquidated damages. I'd nix that one, too.
If you go for some realtor, or advertise for a property manager or leasing agent who wants extra money on the side - instead of a management firm - you should be able to negotiate a contract that would be fair to you both. That's what I'd do. Say, offer 12% of monthly rent, but no other fees. And if the monthly rent is high, I also wouldn't offer a month's rent up front. And, if there is a lull in occupancy, you should not be paying them more money in additional new fees, IMO. Where's the incentive to keep the place rented with long-term tenants? I'd say, if it's vacant, you get no fee that month.
As a retired apartment manager, I'd think this was fair. I know I'm good at screening tenants, and an extra few hundred dollars income for minimal work to me would be great.
In my area, they charge 10%, plus a fee for any repairs they arrange. In some locations, they charge a full month's rent each time they find you a new tenant.
Good advice. It's variable from region to region and depending on what services are required.
I had a manager of sorts for our house when we became absent-landlords. The manager's fee was 10% of the rent every month and he didn't charge a fee if he had to fix something, we just had to pay for materials. He was retired military and this was his side hustle. Oh and no contract either -- just a handshake and either of us could quit at any time.
The ones who charge 5% per month usually are married to the person doing the repairs and take the shortage on management fees on the back by overcharging for repairs.
Most reputable companies charge what we charge which is 10% a month and some owners want us to take care of more which add fees but that is very rare.
If we have to hire people to remodel the place which AHS happened than we charge an additional fee but we don't charge for small repairs for which we hire contractors or handymen and we love to work with contractors that owners like themselves to avoid anyone to think we do anything that is not right and therefore we are not afirliated with any other company.
As everyone said I found it to be 1 month rent equivalent as finder fee then 10%. Pretty much comes out to be a yearly cost of about two months worth of yearly rent revenue. That's strictly for management and finder fee. Does not include any repairs which are on top of those fees.
Do your homework on any management company you might hire. You can have good or bad results depending on the property and company.
Years ago, my grandfather bought a house from a lady that inherited a house and hired a local management company to run it for her. Instead of her getting a check every month for rent, she wound up paying the management company until she threw her hands up and had to walk away. She had the house for under a year and wound up paying for repair calls, monthly management fees, and everything else under the sun. The point of this story is to make you do your homework on these companies.
You might decide to either scrap the management company idea and run it yourself, or scrap the rental property idea altogether. If you have good business sense and access to the knowledge here on C-D, you might see that it is better to run the rental yourself.
I would be out of the country for most of the year, which is why I have been considering a property management company. Otherwise, I would definitely run the rental myself.
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