What is a typical rental manager's fee?
Rental management fees are typically between eight and twelve percent of the monthly rent collected. Some managers may also charge separate fees for tasks like finding new tenants, handling evictions, or maintenance. Be sure to ask for a full breakdown of their fee structure before you hire.
What are the pros and cons of using a rental management company?
Hiring a management company can save you significant time on tasks like tenant screening, rent collection, and maintenance. The main drawback for most people is the cost, which is typically a percentage of the monthly rent. Also, you’ll likely have less direct control over day-to-day decisions for your property. Keeping open lines of communication with your rental management company and asking clear questions about their process can help make sure you're aligned.
How do I choose a rental management company?
When looking for a professional to manage your rental property, these steps can help:
Verify license and insurance: A property manager will typically need a real estate license, although requirements vary by region. You can also ask for proof of their general liability and errors and omissions (E&O) insurance.
Get several estimates: Get quotes from a few different companies. A good document should clearly list all fees, such as the monthly management percentage, tenant placement fees, and maintenance markups, so you can avoid any surprises down the road.
Read their reviews: Check reviews from both property owners and tenants. Positive feedback often mentions clear communication and quick maintenance responses. Be wary of complaints about hidden fees or bad communication, as these can lead to unhappy tenants and lost income for you.
Look at portfolios: Look at the properties they currently manage. You’ll want to see that they have experience with rentals like yours. It’s also smart to check their current listings online to see how they market properties.
Check for tenant guarantees: Some companies offer guarantees, which is a big plus. For example, they might cover the cost of finding a new renter if the first one breaks their lease early.
Ask other questions, like: What’s your tenant screening process like? How do you handle after-hours maintenance emergencies?
What can raise the cost of rental management?
Several factors could affect the cost of having your rental managed, including:
Services needed: The scope of work you need can change the price. A full-service plan covering tenant screening, rent collection, maintenance, and evictions will generally cost more than a one-time tenant placement service.
Number and type of properties: Managing a multi-unit apartment building often has a different pricing structure than managing a single-family home. The total number of units you have will play a role.
Property condition: An older property that requires more frequent maintenance and repairs may lead to higher management costs compared to a newer, well-maintained one.
Location: The local real estate market and cost of living in your property’s area can influence the management fees pros charge.
Vacancy status: If your property is currently vacant, you may pay immediate fees for marketing, showing the property, and screening potential tenants to get it filled.