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Property Management Fees Explained

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You want to make sure you’re having the best property management services for the money when you employ a property management company to act as a liaison between you and your tenants. The services provided by a property management company can vary from ad hoc to an all-inclusive package. There are a variety of fees associated with each. We are unable to provide you with a fee schedule that is set in stone. However, we will inform you about the most popular fees and what they are used for. Finally, you must compare company fee structures and choose the best one that fits into your budget. Some of the most common fees and the services they offer are mentioned below. Check myHomeSpot.com.

Advisory Committee

This is a recurring monthly fee paid to the property owner to reimburse the property manager for managing the maintenance of their property. This fee will range anywhere from 3% to 15% of the monthly gross rent. Some managers may charge a flat monthly fee instead of a percentage, which can range from $50 to over $200 per month. This is a premium that almost all property management firms charge.

Setup or Lease-Up Fee

This fee is paid to the landlord to reimburse the property manager for the time and money spent setting up an owner’s account, displaying properties, and/or other activities that result in tenant placement. You might think of it as a “finders fee” for finding a tenant for your rental house. The property manager can subtract this fee from the rent proceeds until a tenant has been placed and the first rent income has been received. Some property managers have been known to demand this fee in advance of finding a tenant. This fee is usually non-refundable until the property manager has begun the process of finding a tenant or has begun some legwork with the property. This fee can range from nothing to the first month’s rent, and it’s typically a one-time charge per tenant.

Fee for renewing a lease

When a property manager renews a current tenant’s contract, this fee is paid to the landlord to cover the costs of initiating paperwork or contact necessary to enforce the new lease document. If a property manager performs a year-end inspection of the property, this fee could be justified. This fee may range from zero to $200 or more, and it may be paid each time a lease is renewed.

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