Story sponsored by 360° Painting
If you’re new to the property management game, you’re probably confused by the sheer amount of fees you might incur every month. The fact is that property management companies provide a huge number of different services, but this can result in a lot of different fees—some of which might not be clear. Here are the most common property management fees you can expect to encounter.
When you first hire your property management company, you’re likely to encounter a setup fee. This fee is only charged when you first start your services with said company. As such, this fee will cover the onboarding process and an inspection of the property, and it might even cover introductory materials given to the tenants. In any case, this fee will take the form of a flat fee that won’t recur every month.
Early Termination Fee
In most cases, a property management company will provide agreed-upon services for a specific period of time. Because of this, if you choose to terminate your partnership with the company earlier than your contract states, you may be forced to pay an early termination fee. In general, the amount of the fee will depend on how far away you are from the contract termination.
Tenant Placement Fee
Tenant placement fees are fees covering the costs to fill your property with tenants. These costs can cover advertising, tenant screening processes, lease preparations, and even move-in costs. Most times, this fee will be a flat fee, but in more niche cases, it could take the form of a percentage of the monthly rent you collect. This is because a property management company will often actively divert resources to ensure your property is filled as soon as possible.
Property management fees can be a confusing area for a new property owner. As such, we hope that this article on the most common property management fees has helped you become more familiar with the property management process. No matter what benefits a property management company provides, always ensure the company is reputable and reliable. You can easily do this by talking to other property owners in the area. Doing so will give you more perspective and confidence in the journey you’re taking.