An important aspect and consideration in having a property managed is cost. How much is it going to cost to have someone manage our property?
In deciding on a pricing strategy, we understood the importance of making pricing simple. Below is list of expenses a property owner will incur:
This fee covers all cost associated with managing make ready items, sign, photos, online advertising, marketing, receipt of application, screening of a qualified tenant, lease agreement, inventory and condition form, pet agreement, collection of rent, deposits and rekeying of property. In addition, if a real estate agent represents the qualified tenant, a commission is paid to the real estate agent. The leasing fee is 70% of the first month’s rent.
This fee covers collection of rent, management of work orders, owner disbursements, financial statements, accounting documents and direct correspondence with the tenant 24/7. The management fee is 7% of the rent collected each month.
Lease Renewal Fee
A lease renewal fee of $250 consists of a market analysis, to determine whether rental rates have increased or remained unchanged. This information is shared with the property owner and presented to the tenant prior to the expiration of the lease agreement. The term of the lease period may also change based on the tenant situation and may extend another 12 months and/or month-to-month depending on the circumstances. Once agreed, the signed lease renewal document is provided to the tenant and the property owner via online portals.
Here is a list of other common fees a property management company may or may not charge:
- Service fees for managing work orders and property improvement projects
- Administrative fees
Rave property management does not charge any service fees or administrative fees.
In addition to the leasing and management fee an owner reserve is held to maintain a portfolio minimum of $300.00. This reserve is held upon receipt of the first month’s rent by the tenant. The purpose of the owner reserve is to cover expenses that are the responsibility of the owner during the lease term (i.e. replacement of a broken garbage disposal).
No fees are collected prior to the tenant occupying the property. The owner reserve, leasing and management fees are collected once the tenant occupies the properties.
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