Cleveland property management costs will depend on the company you choose and the services you require. An investor with a number of multi-family buildings will pay different fees than a landlord who is renting out a home until he or she is ready to sell it.
While management fees and structures will always vary, there are a few standard costs that most landlords and investors can expect when they’re hiring a management company. Remember that value doesn’t always mean low prices; you have to measure the services you’re receiving against the price you’re being asked to pay.
The first property management cost you are likely to encounter is a leasing fee. This is a one-time fee that you’ll pay at the beginning of your management process or after a tenant has been located and placed. The leasing fee typically covers things like:
Most management companies will charge the leasing fee as a percentage of your first month’s rent. It may range from 50 percent to a full month’s rent, depending on the way other costs are structured. You might also encounter a flat fee. Usually, you can hire a management company for leasing services only if you don’t think you need full-service property management.
The management fee is different from the leasing fee in that it covers ongoing work and it’s charged on a monthly basis. Usually, property managers will charge you a percentage of the rent that’s collected, and they’ll keep the monthly fee before they forward you the rental payment. So, if you rent out a home for $1,200 per month and you pay a 10 percent management fee, you’ll pay your property managers $120 right off that collected rent.
Some management companies also charge flat fees, where it doesn’t matter if your property rents for $600 or $6,000 per month, you still pay the same $100 or $150 in monthly management fees. Make sure you understand what your fee includes. You might find an incredibly low management fee. However, a company that’s only charging you four percent of your monthly rent is probably not providing a lot of services.
Most management fees include things like rent collection, lease enforcement, maintenance coordination with tenants, inspections, resident relations, legal and code compliance, accounting and bookkeeping, and vendor relations.
Many property management companies will include the coordination and scheduling of maintenance work in their management fees. Some may charge a fee for any maintenance work that’s done at your property. So, if you have a plumber take care of a $200 leak, the management company might include a 10 percent upcharge, bringing your plumbing bill to $220.
There might also be a per-project charge for large maintenance issues. Sending a handyman over to fix garbage disposal may be included in the management fee, but a bathroom renovation or the installation of a new deck may require a little extra work, which would result in an upcharge.
What’s important here is that you know what to expect. Make sure all management fees are transparent and explained.
Please contact us at RE/MAX Haven if you have any questions about maintenance, management, or leasing. We’d be happy to discuss our management fees with you.