If you’re a landlord asking about the cost of property management, you need to know that it’s not the most important question you should be asking. That’s because it’s often more costly for you to manage a rental property without a professional property manager.
Monthly Fees
Typically, management companies charge around 10 percent of the monthly rent. There are situations where that fee may go down to seven or eight percent if a particular landlord has a number of high quality properties. In those cases, you can expect a management fee of between eight and 10 percent.
It’s possible you’ll come across a property management company who seems to charge a much lower fee. Maybe you’ll talk to someone who charges nine percent when everyone else you’ve interviewed charges 10 percent. Just remember that there are probably other fees in addition to the management fee you’ll be responsible for paying.
Placement Fees
The management fee is one cost. Another expense will be the placement fee, which covers marketing a property, showing the property, finding a tenant and signing the lease. Property managers tend to be all over the board when it comes to the cost of placement fees. The lowest will be around 50 percent of a month’s rent and the highest will be 100 percent of a month’s rent.
Placement Guarantees
Look for a property management company with a tenant guarantee. If you have a tenant who moves out after four months, you shouldn’t have to pay a placement fee again. Property management companies should guarantee your tenant for the 12 month lease period. People are becoming more transient, so you never know when it’s going to happen. Owners get mad when they have to pay placement fees over and over again, and that’s understandable. Always look for a guarantee.
Renewal Fee
The last fee you can expect to pay is the renewal fee. Usually, that won’t be more than 50 percent of your monthly rent. Most property management companies charge between 10 and 50 percent. This fee is to cover the lease renewal when a property manager successfully keeps a good tenant in your property for another year.
Maintenance Costs
You will also have maintenance costs for your rental property. Some companies mark up the cost of maintenance and hide it somewhere. Companies who employ two or three people in a maintenance department will need to mark up their maintenance costs in order to pay those salaries. Remember that professional property managers should be able to get your maintenance done for cheaper than if you were managing the property on your own. They will have access to licensed, insured contractors. You don’t want to hire anyone off the street to make repairs to your home. For example, a property owner who hires an unlicensed vendor to paint the exterior of a house might save a few hundred dollars in labor and supplies, but if that wood isn’t primed with oil based primer, you may be doing it again within five years and end up costing you more over the long run than if it was done correctly the first time. It is also possible to receive fines if Doingit could result in a fine from the city because lead safe practices aren’t being used. There’s also going to be some peeling paint within a few years because the work wasn’t done properly.
Saving money in the long term is more important than saving money today. That’s why it’s important to hire a professional property manager; it will put more money in your pocket over the next five or ten years. If you have any questions, please contact us at United Properties.
Sergio joined United Properties in 2020. He is a graduate from Pickens Technical College as a Nurse Assistant and as a Small Animal Care Provider in 2010. In the past nine years, Sergio has had various jobs, all focused around customer service.
Eden joined United Properties in 2016. Eden graduated from Davenport University in 2015 with an Associate’s in Business Administration. She’s the Executive Assistant to the Owner of United Properties, with a focus on procedural documentation. She enjoys playing guitar, reading, and doing outdoor activities. Eden is trilingual and able to communicate in English, Spanish, and American Sign Language. 
David joined the United Properties team in 2019 as the Director of Client Relations and Business Development. In this capacity, he is responsible for leading all leasing, application underwriting, tenant relations, accounts receivable, process improvement, remote workers, and general office functionality (essentially anything outside of maintenance and service). David comes from a longstanding career at a Fortune 15 company primarily in a sales and customer service leadership role.
Matthew joined the United Properties in early 2020. He is a graduate of Lee University with a bachelor’s in Intercultural Studies and also a master’s in Discipleship and Christian Formation. Matthew serves as a project manager over the Rent Ready process. He has 20 years of construction experience and over 10 years of experience in leadership positions. He oversees a team of technicians and schedules outside vendors getting properties back to the United rent-ready standard so that they can be leased again.
Carla joined United Properties in late 2019 as a billing specialist. Carla ensures invoices are received from contractors and bills them out in a timely fashion.
Cristina joined United Properties as the Accounting and Billing Team Lead in October of 2020. She has experience as a technology professional, an English-Spanish translator, and has worked the past several years as the treasurer of her condominium.
Rick joined United Properties in 2020 as a Service Coordinator and then later transitioned to the Collections team, where his customer service shines. Rick has an extensive background in customer service and enjoys being able to resolve issues. He and his wife are raising their two kids and in his free time, Rick enjoys making his own homemade jerky.
Harriet joined United Properties as a Accounting & Billing Specialist in February of 2021. She has experience as a bookkeeper and a Property Manager for a Real Estate account. She was a working student during her college days. Harriet loves cleaning because she thinks it is therapeutic. She also loves watching series during her free time, and she’s a fur mom of one dog. Her inspiration to work every day is her family.
Diego has an extensive background in customer service and, most recently in Maintenance and
Paulina joined United in early 2021 as a Leasing Assistant. She has a background studying social work, with several years of experience in customer service. She speaks English and Spanish fluently and loves to learn. Paulina enjoys small road trips and cold, rainy weather. Her dog is her favorite thing in the world.
Jessica has a Bachelor’s Degree in Financial strategies and public accounting and is studying a masters in Blockchain and Fintech regulation. She has previous experience as a customer service representative. She speaks English and Spanish. She loves taking long walks with her three dogs, hiking and road tripping during the weekends.
Chris Good is new to the United Properties Team since June 2022 as a Business Development Manager. With years of experience in both the construction industry (Master Electrician) and the Real Estate industry (Broker), he will closely work with new and experienced investors to facilitate their real estate goals.
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