Warnings of using a property manager

Website design By BotEap.comA property manager is typically paid for placement of tenants, ongoing management, or both. Tenant placement is typically a one-time fee that ranges from 1/3 to a full month’s rent. The ongoing management is paid every month and is normally 5 to 10% of the rent charged. However, sometimes there are hidden fees or other junk fees that the admin may charge.

Website design By BotEap.comGet benefits from repairs.

Website design By BotEap.comProperty management companies may have their own in-house repair and maintenance division or a sister company. Your primary business may not come from property management, but from repair. They can charge outrageously high hourly rates for repair and maintenance. They can also mark the materials without giving you other options to choose from.

Website design By BotEap.comMany times you may not be allowed to use another contractor. Worse yet, they find unnecessary items to repair or replace for a huge profit at their expense. Be sure to negotiate these services and make sure they are in the property management contract. If not, please pass this company up and look elsewhere.

Website design By BotEap.comAdditional charges during property vacancy

Website design By BotEap.comThere are property managers who do not charge unless the property is rented. It gives them incentives to rent your property as soon as possible. Some companies charge you even when the property is vacant. Some charge the same rate as when the property is rented, while others charge reduced rates.

Website design By BotEap.comOn top of that, they charge you a fee to find a tenant. Even if the property manager does not claim any charges during the vacancy, there could still be a catch. A new tenant of a friend of mine moved in on October 1st and the house was vacant in September. However, his property manager still charged him the full commission for September. The reason he gave was because the lease was signed in September.

Website design By BotEap.comLate Fee Policy

Website design By BotEap.comSome property managers charge the entire late fee or non-sufficient funds fee. They argue that collecting late payments requires extra work. It is true up to a certain point; but it makes no sense for them to benefit from it. This is especially true if those fees are set at a fairly high amount in the lease.

Website design By BotEap.comYou may be wondering if the manager is trying to make an easy profit by charging such fees. Plus, they’re the ones who recruited the tenant in the first place! Splitting the fees between the owner and the property manager, or limiting what the manager can keep to a certain amount in a given year, seems more reasonable and fair.