What should you expect from professional property management fees?
One of the reasons rental property owners and landlords shy away from using professional management is the fear of overpaying for a service they don’t really understand. You actually get a lot of value in exchange for your property management fees, as long as you’re working with the right management company. Today, we’re explaining property management fees so you know what to expect when you hire a company to take care of your investment properties.
Property Management Companies Kansas City: Pricing Models
The cost of property management varies because the pricing models vary. One company may charge you a flat fee that covers everything from advertising to inspections to evictions. That will come with a higher management fee. Other companies may have lower management fees, but then they will charge you for every extra service. There’s no right way to do it; you just have to make sure you know what you’re getting before you sign a management contract. Look for hidden costs and ask about expenses you don’t understand.
The first fee you may encounter is the leasing fee. This covers the cost of getting your property rented to a good tenant. It should include all marketing and advertising, as well as the time it takes to show your property to prospective tenants and screen applications. This could be a flat fee, or it could be a percentage of your first month’s rent. Some companies will charge a full month’s rent for their commission.
Monthly Management Fees
You’ll pay a monthly management fee that ranges from 7 percent to 10 percent in the Kansas City area. Make sure you know what you’re getting for this fee. You don’t want to pay the 10 percent every month, and then still have to pay extra in administrative fees, maintenance upcharges, and other unexpected charges.
Renewal Fees and Set Up Fees
Many property management companies will charge an initial set-up fee. There may also be renewal fees that you pay when your property manager negotiates a new lease for your existing tenants. This should be lower than what you pay in a leasing fee. Good tenants are worth more, and you’d rather keep them in place than have them leave. Turnover costs money, and so does leasing out your home again.
When you’re looking for KC property management, don’t simply compare one company’s fees to another’s. Talk about what those fees represent and what you’re really getting. You cannot place a price on experience and knowledge, so be willing to pay for exceptional management. It will end up saving you money.
If you have any questions about property management in the Kansas City Metro area, or you’d like to know more about our management fees, please contact us at Key Partners Property Management.