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Property management companies charge a fee for helping owners manage their rentals. While some property owners want to keep as much profit as possible, there can be a tremendous amount of value in working with a rental management company. The many benefits include finding high quality tenants, less legal problems, shorter period of vacancy, more efficient rent collection process, lower maintenance cost, and 24/7 availability. For some, the freedom of being able to collect rent on properties and pay a property management company to handle daily tasks is worth any fees.


Typical Structure of Property Management Fees

Property management fees can cover a range of factors and services depending on the company and your agreement. Potential fees include:

  • Setup fee – Some companies may charge you to set up your account. This covers the cost of inspecting the property, notifying residents of new management, and other incidentals.
  • Monthly management fee – Usually, this is a percentage of the rent. You will want to make sure that it applies to rent collected and not rent due so that you don’t end up paying even when residents aren’t paying rent.
  • Leasing fee – This fee includes advertising, resident screening services, preparing and signing the lease agreement, and other move-in tasks that will need to be completed with each new potential resident.
  • Maintenance fee – If you want the property management company to handle any or all repairs and maintenance, there will be fees associated with these services.
  • Eviction fee – In the rare cases where an eviction is necessary, the company can handle paperwork and court costs.
  • Vacancy fee – Some companies include a vacancy fee that that either be a one-time fee or a fee that is paid per unit.

Average Property Management Fees

Typically, a property management company will charge a certain percentage of the total rental price. On average, fees range from 6-12%. The exact percentage will depend on a variety of factors including:

  • The location the property and the number of units.
  • The overall condition of the property. New properties or those that have been recently updated probably won’t require as many repairs or constant maintenance.
  • The number of services. With most companies, you can pick and choose the services you want to take advantage of. Some owners are more than happy to turn over most of the responsibilities to the property management company. As you might expect, more services will result in higher fees.
  • The type of property. Residential properties may come with a different fee percentage than commercial locations.

Rental Property Management Fees Are Designed to Go Towards Services that Make a Property Owner’s Life Easier

Rental property management fees allow owners to partner with professionals who have an insider’s knowledge of the local markets and established relationships with contractors, inspectors, and real estate agents. Owners don’t have to worry about gathering multiple bids on repair projects or constantly being on-call for their residents.

Property Management Fees and Services are the Key to Unlocking True Passive Income

Essentially, property management companies act as the first line of contact for residents. The company’s representatives will take care of collecting rent, answering phone calls and emails, schedule regular maintenance, and repairs, and work to lease vacant properties. They will also conduct inspections of the properties to make sure no one is breaking the lease agreement and that the residents are properly caring for the properties. This allows the homeowner to take more of a hands-off approach and let the company manage any problems or deal with problem residents.

Rental Management Fees are Only a Part of Choosing the Right Real Estate Management Company

If you are interested in hiring a property management company, it is important to do your research and take the time to read through their contracts. Unfortunately, not all companies are created equal. After reading reviews and speaking with representatives, you may find that not every company delivers on its promises. You will want to hire a company that has a track record of success in your area and has received positive reviews from its owners. The good news is that this information should be readily available to doing a little research up front can save you time and money.

Once you are ready to sign an agreement, make sure that you are clear about all the terms and fees. You will want to make sure that they have thoroughly outlined in writing, the services you will be receiving and all associated fees. This will help avoid any misunderstandings and provide you with legal protection if they don’t fulfill their obligations. Hopefully, you will be working with a company that values transparency, but it is still important to make sure you go through the fine print.

Finally, be sure to review the company’s other legal documents including the lease agreements that are given to residents. The lease should include clauses that protect the owner and it should be state-specific since laws can vary. If you are new to leases, it may be a good idea to have someone with more experience or expertise review the lease agreement.


Receive a Free and Transparent Quote on Our Property Management Fees Specific to Your Investment Property Today

Hiring a residential property management company may not make sense for every real estate investor, but it can provide valuable services to the right person. Deca Property Management has been serving property owners throughout the St. Louis, Missouri, area for decades. We provide owners with a range of services at competitive prices. Our owners enjoy the best in advertising and marketing, resident screening, lease management, maintenance and repair, and much more. If you think that working with a property management company may be the right decision for your rental business, contact us today. We can start with a free property assessment and provide you with answers to all your questions.