Property Management Tips

For those who have rental properties and either have property management or are looking to get property management, here are some tips to maintain a successful arrangement between yourself and the management company.

  • A property manager will write a contact that is weighted in their favor.  Until you sign, all terms are negotiable, if you don’t like something, ask.  Its no different than shopping around for anything else.
  • 10% of rents collected is the standard fee.  The range is typically 8-12% for residential properties.  There may be other fees for advertising, inspections, and lease renewals.
  • A property manager should be expected to earn their fee.  The pros can up-sell the rent of a house and recover much of their fees that way.  Market rates operate in band.  A manager that can capture rents towards the upper limit of the market rate is worth keeping
  • Just as rent is due to the manager, typically by the 5th, you should expect your payment on time every months if the tenants pay on time.  No exceptions on this one.  Timely payment is a must and allows for business to be closed out on a monthly basis.  A good manager will operate like clockwork and issue owner checks approximately two weeks after rents is collected.  This allows for checks to clear and any housing subsidy payments to process.
  • A response to your questions should be filled within 1 working day.  Even if the question requires research, there should be acknowledgement on their part.
  • The manager should not charge low rents in order to fill a property quickly, realizing that since their cut is 10%, the difference in $100/mo in not much to them.  That difference is significant to you, the owner.
  • The manager should not be succeeding more than you are.  If this is the case, adjustment is needed.  Selling the property or terminating the agreement are options here.  As would renegotiating the contract.  The owner bears much more risk than the manager and should be rewarded as such.

About Steve @ FPO
Hello FPO readers, I have been writing on financial topics for about 12 years now, but I have only recently reignited the fire of publishing online. I have to say, its good to be back. I am an electrical engineer by trade who enjoys all topics engineering and financial. I started Financial Place Online (FPO) to create a value added financial news and education website that would provide a refreshing daily financial read. Financial Place Online websites are built around the principles of consumer empowerment, leveling the playing field, zero spam tolerance, and none of those annoying sidebar or banner ads. For us, it's all about enjoying a good read.

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