Many would-be landlords interested in renting out their properties may struggle to figure out exactly what kinds of fees they can expect to be charged by a property management company. There is no defining set dollar amount, but rather, a series of variables that determine the final cost of the service.
Rest assured, the benefits of a property management company are worth every penny, especially for those who may not realize just how competitive and affordable their services are. However, it’s good to know how property management companies calculate their fees before deciding to work with one to rent out your property.
AVERAGE PROPERTY MANAGEMENT FEES
Depending on the nature of your property, your needs and location, and even the number of tenants renting out your space, a property management company will charge an affordable rate in exchange for great service. The typical range of fees is between 6% to 12% of the rental value of the property, which pertains largely to landlords charging mid to high-level rents. Often, a property management company will swap this for a flat fee in order to manage properties with a lower rental value.
Landlords may also own multi-unit properties with many different tenants, and a property management company may simply decide to charge a flat rate to manage all of them simultaneously, as opposed to variable rates per tenant. This is done largely for the convenience of both parties involved, and helps maintain smoothness and consistency of service.
Certain property management companies may charge marginal fees for extra services required only once in a while. These can include everything from finding and placing new tenants, to evictions and maintenance charges. Similarly, extra fees may be incurred when advertising your space to potential tenants, as this takes time and money.
These are considered standard fare, and of no real surprise, but landlords should be aware of anomalies that may arise in the rental process. One of these instances is the act of evicting a bad tenant, which is costly and time-consuming. A property management company can handle this problem much better than most, but charges may be billed for legal processes, notably in pursuit of a court eviction order, which can cost up to $2,600 on average in Ontario.
A good property management company knows the value of working with landlords to draft up the right package of services, for the best cost. There are lots of factors that both parties should talk over in order to come up with a mutually agreed price, but landlords should be aware that it’s usually standard practice for the property management company to charge for a flat range of services.
Outside of these basic services, landlords can pick and choose from a variety of ancillary services that are customized for their benefit. This can help save time, money and headaches, all for a nominal and acceptable rise in fees. When in doubt, always ask. Property management is all about the relationship between the company, the landlord and their tenant(s), and the better that relationship is, the happier everyone will be.
Setup fees are not uncommon when dealing with a property management company, and these tend to be upfront when the account is first created. This is largely administrative in nature, and designed to save time and money later on. By setting up your account properly, a property management company is ready to represent you, so that you can immediately shift your focus to other things.
BANG FOR THE BUCK
If you’re a landlord reading this for the first time, you’re undoubtedly surprised by how affordable and straightforward property management fees are. This is good news, as it can help make your decision that much easier. In return for the modest fees charged each month, property management companies deliver a wealth of services that can give you fantastic peace of mind.
Remember what a property management company brings to the table in terms of value – the knowledge and experience necessary to seek out and locate excellent and reliable tenants, shorter property vacancy cycles, less expensive legal complications and hassles, a robust rent collection process, etc. When added up, this presents an incredible level of value, especially for landlords who want to focus on their career, family or personal health.
Now that you understand the variables surrounding property management fees, you’re better equipped to know what to expect as you move forward. Here at RentCore, we’ve always prided ourselves on our ability to work with landlords with properties of all types, and flexibility is a key component of our strategy.
If you’re interested in renting out your property, but you don’t have the time to focus on managing it, we can help. We’d like to hear from you so that we can determine the best range of services to offer you. Contact us today!