Many first time landlords shop by price and then hope they get the service they desire. This is only because they’re unsure about what to expect. Experienced real estate investors may say “Tell me about your experience. How do you handle evictions? What would you recommend specifically for my property/situation?” We feel that the best way to ensure overall satisfaction is to ask questions and listen to your particular situation and goals. Next, determine what type of services you may need or desire. Then once we’ve found a good fit, discuss the details and pricing.
Over the long run, a great manager who applies insight and care may cost you a few bucks more per month. It’s easy to miss how cheap management could cost you thousands over time in lost rent, vacancy, maintenance problems, turn time and property deterioration due to lack of oversight. We hear consistently how hard it is to get other managers to just return calls and emails.
Experienced investors look below the surface to reduce avoidable expenses and increase tenant retention. If this is your first time to work with a property manager take the time to look at details beyond the contract. Many companies charge fees that you may not ask about up front. Some low cost providers charge to pick up the phone and many up-charge on third party bills.
48% of management companies charge 10% for monthly management services. Why would almost half of the industry charge such a similar rate? There are costs to do the work properly. Finding a low cost provider doesn’t permit a budget to offer excellent service. It’s basic math. You really do get what you pay for in this instance.
You can always find a cheaper provider but will they be around tomorrow or actually show up and follow the law when needed? That’s the real concern. To stay in business low cost property management companies may skimp on software, staffing, 24/7 live call support for your tenants and maintenance needs, a physical office, the ability to move money electronically and much more. Keep in mind that if a weak manager gets you into a bad situation, attorneys may charge $320/hour or more to get you out.
Lastly, keep a lookout for more than just the monthly fee when comparing prices. There are the initial leasing fees which are divided among the listing agent and renter’s agent. There are monthly management fees as well as service and renewal fees. What you want to see is an increase in the value of your home in years to come. If a company doesn’t help you maintain it properly or treat your tenants with common respect that won’t happen, the tenants will leave and you’ll spend more in vacancy, turnover and end up with deferred maintenance. Keep the fees in mind but look into the details to obtain the best results.