If you’re lucky or fortunate enough to own a property that you do not currently live in or use, you might strongly consider renting it out instead of selling it. It’s possible you have plans for that property in the future, like turning a vacation home into a rental home, or you just somehow have a second home that you’d rather keep than let go. That can make a lot of sense if you think property values and sales are low right now and will be high in the future.
It also just might be the case that you simply have no idea what to do with a property and aren’t willing to make a decision right now. Renting it out should mean your wealth is preserved, given that you still own the property, but you also can generate rental income out of it while you own it.
While there are clearly advantages to maintaining your net worth while also generating income along the way, you do face the prospect of being a landlord. That means you have to choose to either handle it personally, which will make you the most money but also possibly eat up your time, or hand off the responsibilities to a property management company in your area. They could then handle much of the work for you, freeing up your schedule and personal commitment, but you’d also make less money since they would charge for their services.
Property Management Companies
The decision obviously comes down to the value of their services versus how much they might cost you, leaving you wondering how much do property management companies charge for their services. Unfortunately, it’s not an easy question to answer based on a number of factors.
For starters, property management companies might have different ways of charging for their services. Some will just take a percentage commission off of the rent they collect, in which case, their fees are taken out of the rent payments they collect from tenants. There is simplicity to this, as you don’t have to pay them any money yourself. Others might charge a flat monthly fee though, regardless of whether there are tenants or not in place. Others might even go so far as to charge a la carte pricing, nickel and diming you to death for every little thing they need to do, be it background checking prospective residents or commercial clients for retail spaces to scheduling contractors for maintenance issues.
Further compounding all of this is the fact that many property management agencies are going to have cheaper prices and volume discounts for big clients that have multiple properties or units to deal with. On top of that, as much as property values fluctuate from market to market, so too do the going rates for property management services.
Property Management Service Providers
Sadly, the only way to know what property management service providers are going to charge you in your area is to look up at least three to five options and then get pricing from them. Given how every property is different and each contract might have various levels of service to them, you’re likely going to have to contact them for consultations and quotes. Having said that, they might have some basic pricing information available on their websites.
Service levels can vary drastically though, as you might have some properties where you want the managing agency to handle landscaping and yard work, whereas others might just be left up to the tenants. Obviously, the more a property management agency has to handle, the more they are going to charge for their services.
When it’s all said and done though, using a property management agency usually proves to be worth it. You’re not the one getting called at three in the morning about a busted pipe spewing water all over the place, nor does your phone even have to ring except from the agency calling you, as they act as a buffer between you and your residents. You can also spare yourself the burden of having to interview residents, list openings, and sadly evict those that do not pay on time or otherwise violate their contract.
While pricing options will vary with every market and agency, property management firms know that they make money providing real value for what they charge, so most are likely to have some level of service that makes it worth the money spent. To know more contact us or visit the website at https://3cre.com/.