Most people are naturally inclined to look for a bargain, and when you’re shopping for shoes or groceries, that’s probably a great idea. However, when it comes to professional property management, cheaper isn’t always better. You have to
measure what you’re paying against the services you’re receiving and the quality of those services. A discount property manager can actually cost you more money because of bad decisions and inexperience.
Property Management Fees to Expect
Most property management companies will charge you a monthly management fee as well as an initial tenant placement fee or a leasing fee. These costs are often a percentage of your rental income, but some companies will charge a flat rate instead. Beyond these two standard fees, there might be other costs such as renewal charges, maintenance markups, or inspection fees. Talk to your property manager about all the costs before you sign a management agreement. You don’t want any surprises.
Discount Danger: What Low Cost Managers Don’t Tell You
Do some digging when you come across a property manager who has a rate that’s much lower than some of the other rates you’ve seen. Sometimes, they’ll accept lower rents just so they can get a tenant placed in your home quickly. They will probably not screen that tenant as well as they should, either. Their staff is likely unlicensed and has little property management or leasing experience. Sometimes, their agents work solely on commission, so the need to place a tenant and sign a lease is financially motivated, and it could mean that they don’t screen at all. Another problem with low cost property management companies is that they don’t have a knowledge of the local market. They may be part of a national company and not focused on what properties are renting for in this area and what good tenants will require in a rental home.
Invest in High Quality Property Management
When you find a good company that’s a little more expensive, you’ll end up saving money in the long run. The staff you work with will be dedicated, established team members who are willing to develop a relationship with you and get to know your property and your investment goals. They will answer your phone calls personally and be responsive to you and your tenants. They’ll understand the details of your property and its rental history. Most importantly, they will protect your investment by preserving its condition, pricing it properly, and screening tenants rigorously to place only those residents who will pay on time, take care of the home, and follow the terms of the lease.
When it comes to property management, paying less can often cost you more. Get a good tenant, a lot of experience, and the higher Return on Investment that comes with a professional property manager. If you have any questions, please contact us at 3G Properties Group.
