When it comes to determining how much you are willing to pay in property management fees, you have to evaluate the price against the service you expect. First, determine what your goal is. You might be looking for the lowest price, the most experience, the best reputation and other things that will drive your expectations. If you are looking for a company with a great reputation, who is able to rent properties quickly, you might be more inclined to pay a higher fee for that level of service.
A good analogy to use when considering fees is what you would pay for other important services. Most people shopping for a great financial advisor are not going to make their decision based on the fees charged, but on the results the person has delivered to other clients. Likewise, when you or someone you love needs critical surgery, one of the questions is typically not going to be “how much do you charge?” You’re more interested in getting the problem resolved successfully.
Comparing property management services is similar. When you determine what kind of results you’re looking for, you look for the person or company you believe can consistently accomplish your goals. I recommend that clients focus on results and not get distracted by paying one or two percent more in management fees. Unless, of course, the lowest fee is the most important thing you value in a property manager. The key is in setting your expectations. The company charging the lowest fees may not have the resources to show your vacant property immediately which, in turn, costs you money in lost rents. Lost rents on a vacant property can quickly surpass any savings you may realize on a slightly lower management fee.
Consider what the property management fee includes. It will typically include rent collection, the supervision of maintenance and repairs, payment of bills associated with the property, inspections, and lease renewals. Be careful about whether these things are included in your management fee or if additional fees are charged for these services. One management company may charge a 10 percent management fee that is all inclusive while another management company charges an 8 percent management fee but then tacks on additional administrative or processing fees that when added up can be much higher than 10 percent. Make sure you look at all of the details, and not just the management fee. If you are looking for a professional property management company, please give us a call. Contact us at Walters Home Management for information on what we provide to our tenants, and how you can get the most from a relationship with a great property manager.