One month rent plus 8.5% for property management?

[Alvaro Leis]

Hello I bought a house in Atlanta and was trying to get a property management company to rent it out since I’m far from Atlanta (about 1 hour). I found a company with good reviews in google so I called them, they charge one month of rent plus 8.5% monthly, this is my first property and before getting it I watched a lot of webinars and listen to podcasts and they always suggest 10%, one monthly of rent plus 8.5% monthly is around 17% a month is that about average? This is a very small house in a C neighborhood but I don’t think that has something to do with management pricing.

[Maya Roberts]

Originally posted by @Alvaro Leis:

@Maya Roberts the monthly rent is $900 month, they charge me $900 and then 8.5% monthly, so the $900 that they are charging me upfront takes another 8.3% of the monthly rent so it totals 16.8% month 

 $10,800 annual income.  $900 leasing fee. $918 annual management.  Your total expense is $1,918 for the year.  17.7% annual.  That is how I would suggest you view it.  Six in one if you decide to view it monthly or annually. However, your monthly payments should only be 8.5%.  That large leasing fee skews the 'monthly percentage' which is why it is best to view 'annual percentage'.

Typically investors look at this as monthly rate and leasing.  Your leasing fee might not occur every year.  However, the monthly fee routinely occurs.

An annualized 16-18% management expense is typical.