Wednesday, May 7, 2014

Ask an Agent: Property Management Costs

What my company mostly does is manage properties. We started with my broker's 27 personal rental properties and today we manage about 110. I've worked there for almost 5 years, so I've seen it all from awesome tenants who leave the property better than when they found it, to people leaving dead animals at move out. It gets...interesting...sometimes.

If you have that great tenant that never moves and calls in one repair request a year, this post is not for you. You can just go here. If you have 5 or more units, people calling an emailing all the time with repair requests, or trouble tenants who don't pay, you probably have wondered, "How much does a property manager cost?"

At North Texas Homes, it's one month's rent to find the tenant. We just don't throw it into the MLS and wait though. That price includes advertising on other internet sites, showings, fielding calls from interested folks, tenant screening (credit, criminal background, landlord reference, and employment verification), drawing the lease, and collecting the deposit. And since it's the in MLS, part of that one month's rent goes to paying the other real estate agent.

On a monthly basis, the charge is 10% of the collected rents up to $125. So for a $600 per month rental, the charge is $60. For a $1400 a month rental, it's only $125. We collect rents, take all repair requests (we even have an after hours emergency hotline that's available 24/7), collect late fees, and if we have to, evict. If your tenant is not paying or the property is vacant, you DO NOT pay the monthly fee.

But what about renewals? And repairs? It depends on your contract, but most of owners only pay $75 if a tenant renews. And repairs, we don't mark up. We do hold a reserve of $300 for little repairs that come up, like a clogged sink. Anything over $300, we call the owner first.

Did I cover everything? Any other questions about costs of a property manager and what we'll do? Feel free to ask!

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