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.
Rental inspections serve several purposes for investors who own real estate in Cleveland. The move-in and move-out inspections are absolutely critical, and it’s also a good idea to conduct an annual inspection when your tenants are in place.
Today, we want to share some best practices with you when it comes to your rental inspections, and we’ll also take this opportunity to explain how we manage the inspection process when we’re managing a rental home.
The most important property inspections you will do are before a tenant moves in and after a tenant moves out. Once a lease is signed and a tenant is preparing to take residence, you need to thoroughly document the condition of your home. Go through it in great detail. Take notes and pictures. You’ll want to photograph everything; each appliance, all the floors, the counters, the doors, the windows, and even the ceilings. The idea is to document what the property looks like at the time the tenants move in.
After your tenants move out, you’ll do the same thorough inspection with the same checklist and photos. This will allow you to compare the condition of the property after the tenants have moved out. You’ll be able to clearly see if there’s any damage for which you can hold those tenants responsible. When you’re using your inspection reports to make decisions about the security deposit, remember that you cannot charge for normal wear and tear. However, tenant damage going beyond normal wear and tear should be evident and supported by your inspection checklists and photographs.
We like to do an annual inspection during the course of the lease term for two reasons. First, it allows us to look for unreported maintenance issues. Sometimes, tenants are slow to let us know when there’s a problem that they perceive to be minor. We check the property for leaks under sinks, safety and health issues, and any potential problems like tree branches falling onto the roof or problems with systems like the heating and cooling unit or the appliances. If there are any repairs that need to be made, we make a note of it and schedule the work right away.
This inspection also gives us the opportunity to make sure your tenants are following the terms of the lease agreement. We can look for unauthorized pets or people, we can make sure the home is clean and the air filters are being changed regularly. We can look for any signs that the tenants may be neglecting or misusing the home. This inspection is for your protection and the protection of your investment home.
Landlords and investors always want to know what they can expect when they begin working with us. We will inspect every vacant home to make recommendations for improvements and we’ll take a lot of pictures. This helps us come up with a leasing and management plan that will best serve you and your investment goals.
When you’re looking for Cleveland property management, it’s important that you find a reputable and reliable leader in the industry and the local market. We recommend that you first conduct a little research online. Once you find a few companies that seem like strong contenders, contact them for an informal chat. They should be able to answer these 10 questions.
Experience is important, and many management companies will be anxious to tell you how long they’ve been in business or how many years of experience their property managers have. All of this is great, but what you really want to know is whether they have experience with properties like yours. Do they specialize in investment properties? Do they own any themselves?
Communication is critical and with technology, it’s easier than ever today. There’s no excuse for a property manager not being available to you. But, it’s important to set expectations early. So, find out how frequently they’ll communicate and which platforms they’ll use. Will they call or text or send an email? Make sure your preferred method and frequency of communication is compatible with what the property managers have planned.
Avoiding vacancy is important, and you want to be sure your home is going to be rented quickly to excellent residents and for the most money possible. Find out how they advertise vacant homes, and which online rental sites are used to list your property.
Discuss the tenant screening process and the application procedures that the management company follows. It’s important that prospective tenants are being screened thoroughly and consistently.
This is an important question because the laws are always changing and you want to be sure your property management team has access to the best resources and tools. Look for a management company that belongs to professional associations like National Association of Residential Property Managers (NARPM), where they can get a lot of training and support.
Some management companies have in-house maintenance personnel and others outsource the work to local vendors and contractors. There’s no one way to do it, just make sure you understand the maintenance process. Ask how long it typically takes to complete a minor repair or a major project.
You want to know how rent is collected, and perhaps even more importantly – you want to know when and how it’s paid to you. Most management companies will pay via direct deposit so you’re not stuck waiting for a check. Ask about late fees and other consequences for late rental payments.
Technology is an important way to deliver property management services efficiently and effectively. You want a management company that’s willing to invest in technology and provide things like online owner portals, where you can log in and see rental payments, maintenance requests, and outstanding invoices. You should be able to access accounting statements and financial reports whenever you need them.
A lot of landlords worry about eviction. Your property manager should have experience filing evictions, and you should feel comfortable that if your tenant stops paying, he or she will be removed and replaced with a tenant who follows the terms of the lease.
Every property management company has a different procedure for billing. It’s important that they’re transparent and you know what you’re paying for, and how that money will be collected.
We’d love to answer some of these questions for you ourselves. Please contact us at RE/MAX Haven to find out what it would be like to work with our talented property management team.
The Cleveland rental market is generally good for investors; it allows you to earn favorable rental income in the short term and incredible long term returns. If you’re looking for ways to maximize the return on investment (ROI) that your rental property provides, we have some ideas.
Everyone has different investment goals, but whatever your plans for the property happen to be, there’s a lot to gain in adopting these tips and tricks as part of your leasing and management strategy.
Your home’s rental value has a huge impact on your ROI because it directly affects your vacancy and turnover rate. Consider this when you’re pricing your rental property. Many landlords will have a number in mind that reflects what they think their home is worth. But, the market drives the price. It doesn’t matter how much rent you need to cover your mortgage and expenses. Good tenants are only going to pay what the market demands.
Before you even think about pricing your home, take a look at the comparable properties in your area. Get some good data on what they have rented for and how long they were on the market. This will help you price your property effectively and competitively. The highest rental price does not always create the best ROI. Sometimes, a slightly lower price that attracts a great tenant quickly will earn you more. If you retain that tenant for the long term, it’s even better.
A well-maintained home will always rent for more. To increase returns, you want to protect and preserve the condition of your investment and provide a comfortable, safe, and attractive place for good tenants to live. Make sure there isn’t any deferred maintenance at the home. Before tenants move in, make sure everything works well. Check the locks on windows and doors, test each outlet, run the water in every faucet, flush the toilets, and turn on the appliances.
When maintenance is requested, don’t drag your feet. Respond immediately, even if it’s a routine repair that seems minor. There has never been a small repair issue that simply went away. They always get more complicated and more expensive. Save your money and increase your profits by taking care of maintenance preventatively and responding to your tenants when they let you know something needs to be fixed or replaced.
The most important thing you can do to earn more money on your rental property is to work with a professional Cleveland property management team. Your property managers will help you earn more income, rent to better tenants, and be proactive when it comes to maintenance. Property managers ensure rent is collected on time, keep you in compliance with all state, federal, and local laws and regulations, and understand how to effectively inspect, maintain, market, and care for your rental home. We take care of tenant retention and tenant relationships. We have access to the best and most cost-effective vendors.
These are just a few of the ways you can keep your expenses down and your returns up. If you’d like to hear more, we’d love to talk to you. Contact us at RE/MAX Haven.