Property Management Costs?

[Kyle Miller]

What are the typical costs for outsourcing property management of your single family , multifamily, and commercial properties? What can you expect for that cost?

[John Evan Miller]

The truth is that investors need to pay more attention to what and how property managers do things; rather than just simply asking them if they can offer them the cheapest rate. Here are some things to consider and questions to ask your property manager:

Renting the Property: How do they do it and where do they advertise? Will they advertise that the property is available for rent by posting a sign on the property, placing an ad in the newspaper and/or posting an online listing? How long are properties on the market for before they are picked up?

Screening Tenants: Will they will personally interview the applicants and perform a credit report on them to make sure they will be reliable tenants? Are they preparing lease agreements with tenants?

Maintenance and Repairs: How do they deal with these issues? Will they contact you for your authorization before performing a repair? Always check that your property management company has working relationships with only dependable and honest licensed repairmen.

Rent Collections and Delinquencies: What will the property manager do to make sure that you receive your monthly rental payments? What do they do if tenants are late with their rent? How much leeway will they give a late paying tenant before they take action, or consider eviction?

Reporting: How regularly will they report to you on the rental collections? What format will they present these ledgers to you? Are they timely?

Before you sign a contract, I recommend that you contact a couple of people who use their services and check and make sure that others are happy with their work.

Now, what will this service cost you? Not much. Typically, property management rates are between 5 – 10% of the total rent with the average being around 8 - 10%. That is a small price to pay to sit back and enjoy the return on your investment.