Unveiling the True Costs of Property Management: What You Need to Know.
Like all savvy real estate investors, you’re eager to maximize the potential of your investment, so you’re ready to step into the world of property management. However, there is one question that won’t go away: how much do property managers actually charge?
In your search for understanding, you’re not alone. We’re not just going to give you statistics in the lines that follow; instead, we’re going to give you a thorough explanation of property management charges. Understanding these fees can enable you to make wise decisions, regardless of how experienced you are as a property owner or how new you are to renting out your properties. Beyond the money, property managers help with hassle-free upkeep, regular rent payments, and even tenant evictions. Come along as we untangle the complex web of property management costs and savings.
There’s a reason the property management industry is experiencing record growth. They can alleviate maintenance issues, track down payments, and even handle evictions.
It’s no secret that property managers can be helpful. But how much do they cost? It’s the most common question we hear from would-be landlords.
VerraTerra, located in Bothell, Washington, offers monthly management services for a fixed fee of $175 per month, regardless of the rent. You may wonder how that compares to traditional management service fees.
In this article, we’re breaking down the cost of hiring a traditional property management company and how that compares to a fixed fee (flat rate) property manager, like VerraTerra. Read on to make an informed choice when you start getting quotes.
Setup Fee
Are you ready to hire a property manager? The first most property managers will ask for is a set up fee.
Setup fees are standard property management fees that go towards starting an account. This one-time fee usually covers inspection of your property, communication with the manager, and outreach to tenants. Setup fees usually run a few hundred dollars.
VerraTerra does not charge a set up fee for new clients. We perform typical account setup services at no additional cost.
Management Fee
When people talk about property management fees, they’re usually referring to the monthly management fee.
Rental property management companies charge a monthly management fee to cover their duties. These duties typically include collecting rent, coordinating repairs, dealing with emergencies around-the-clock, and conducting inspections.
In most cases, your management fee depends on your property. Generally, management fees are about 8-10 percent of the total rent.
As of June 2018, the average rental in the Seattle area runs over $2100 per month, making a typical management fee about $180 to $210 per month.
VerraTerra offers a flat management fee, regardless of rental rate. Compared to the traditional rate set up, this can save you several hundreds of dollars per year.
Leasing Fee
Is your property vacant? If you’ve recently purchased a new rental home, it’s likely you’ll need to find tenants.
A leasing fee is one of the most typical property management fees. It covers the cost of advertising and setting up showings of a vacant property. Your management company can also conduct background screenings and application reviews.
Paying a leasing fee might seem like a pain. But it’s a small price to pay to get qualified tenants in your property quickly. Leasing fees are usually between 75 percent to 100 percent of one month’s rent.
VerraTerra Property Management charges a fixed fee of $1500 or one month’s rent – whichever is less. Considering the rental prices in the Seattle area, this usually represents a significant savings for these property management clients.
Vacancy Fee
If you’re having trouble filling your property, you might have to pay a vacancy fee. VerraTerra does not charge a vacancy fee, however many management agencies do.
A vacancy fee is a payment you make to the management company when your property is empty. The total amount is based on a rent schedule or a predetermined flat rate.
Vacancy fees are one of the hidden fees that many property owners encounter.
Always read your contract language to look for additional or hidden costs. Vacancy fees can be expensive, especially considering this is a time when you aren’t receiving rent.
How Much Do Property Managers Charge?
How much do property managers charge? As you can see, it depends.
Hiring a property management company is a big investment. Take extra time to review your agreement and discuss all fees prior to signing a contract.
Are you looking for a property management company in or around Seattle? Our simple, fixed fees will help you maximize the profit from your rental property. Contact us today to learn more about our services.
