How much do property managers charge? This is the number one question I get from investors who call inquiring about management services. It’s not an easy or straightforward answer, and today we’re talking about why.
Property Management Fees and Costs
Asking how much we charge is like walking onto a car lot and asking how much a car costs. You need to know what vehicle you want and what options you’ll need in the vehicle.
We take into account between 17 and 20 different criteria in evaluating how much it will take to manage your property. These are the cost drivers like location of the property, proximity to our office, the number of units, and the rent being charged. All of those things and many other factors affect setting the management price. We also have to consider the resources that will be needed to effectively manage a property and drive revenue.
Salem Property Management Charges
Some management companies go with a flat rate or a per-door rate, and sometimes that fee is charged regardless of whether a property is occupied. Others will charge a percentage of the incoming rent. If you do a simple Google search, you’ll see that the national average for management fees is 8 to 12 percent. That usually holds true, but on larger properties, it may be a little less depending on things like price and location.
With property management fees, those who charge a percentage of gross receipts may include all their services in that cost, or you’ll have to pay additional for some of the one-time costs like evictions. Sometimes, an all-inclusive rate is the best way to go, and sometimes using services only as they’re needed is more cost-effective. It depends on you and your property. However, shopping around with these factors in mind is important when you’re evaluating property management companies.
Management Company Reputation
The other thing to take into account is the reputation of the company and the services they provide. There are a lot of smaller companies that are able to offer low fees because they have low overhead. But, they don’t necessarily have the resources to manage effectively, so they don’t drive a lot of results. You may be paying less in management fees, but you’ll face higher vacancies and poor tenant screening.
At Centurion, we don’t aim to be the cheapest. We want to be the best. Driving results is the most important part of what we do. We want to take care of our owners. We know this is one of your most valuable assets, and we want to provide cash flow in the short term and drive appreciation in the long term.