Cost of a Property Manager
Owning a rental property is a great way to generate passive income, but taking on the responsibilities of a landlord isn’t for everyone. You may be considering hiring a property manager, but it’s advised to know how much a property manager charges and if there are more affordable options, like landlord software, to check out first.
We share how much property managers can charge, the fees to save for, and if they are really worth investing in for your rental business.
How Property Management Fees Work
Property managers typically charge various fees depending on what tasks you need help with or for when certain situations (like an eviction) occur.
Each property manager can vary in what fees they charge, but the fees usually consist of the following:
- Setup fee: Property management companies can charge a one-time setup fee per unit to set up an account with the property manager and cover any required property inspection fees.
- Management fee: Property managers charge a percentage of the rent price (typically a percentage) or a flat fee on a monthly basis to manage your tenants, collect rent payments, and more.
- Leasing fee: The leasing fee is usually one months’ rent or a certain percentage of the rent price that covers the cost of advertising your rental, conducting showings, preparing a lease agreement, and performing a move-in inspection. If the tenant decides to break the lease or is evicted, then most companies refund the leasing fee.
- Lease renewal fee: When a tenant decides to renew, the property manager is responsible for performing a rent price analysis to recommend any rent price changes and create a new lease agreement.
- Maintenance and inspection fee: If you’re planning on hiring a property manager to help with your long-distance real estate investments, prepare to cover a maintenance fee for when a property manager helps handle maintenance requests.
- Eviction fee: Although evictions don’t happen often, there may be a chance that a property manager will need to facilitate the eviction process for you.
- Late payment fee: Property managers can charge fees for late rent payments.
How Much Do Property Managers Charge Per Month?
Property management companies can vary in how much they charge per month, but it can range anywhere from 8% to 12% of the monthly rent price. If the rent price for one of your properties is around $1,500 per month, then you can expect to pay anywhere from $120 to $180 each month, not including the other fees listed above.
What Factors Affect the Cost of Property Management Fees?
Property management companies charge varying prices based on the type of property, the amount of units that need to be managed, how much you need their help with, and market competition.
If you own a multifamily home or duplex, then this may cost more for a property manager to oversee compared to a single-family home. You should check with more than one property management company to get an idea of how much each is charging for the services you need and if it’s worth investing in.
Is Hiring a Property Manager Worth the Cost?
Hiring a property manager may be worth it for real estate investors looking to offset the responsibilities of managing a rental to someone else or need help with a rental that’s in another state. A property manager can not only be the go-to person for your tenants, but can help you reduce in-person visits.
The decision on whether or not you should hire a property manager will depend on what aspects of your rental you need help with, if you’re willing to do everything yourself, and how much you’re willing to spend on a property manager.
Looking for an Experienced Residential Property Manager?
If you have a home to rent in the Orlando area be assured there is no substitute for experience. Covering Clermont, Winter Garden, Windermere, Dr Philips, Kissimmee, Davenport, Champions Gate, Hunters Creek and Haines City. We remain focused on this greater Orlando area to ensure we are able to provide outstanding service to our Clients without sacrificing performance. Looking for an experienced residential Property Manager in the Orlando area with a demonstrable track record – look no further.
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