Managing a rental unit or several units takes time and effort that many people simply can’t dedicate to have a successful income property. Turning to an experienced DC property management company can make life easier for both you and your renters, allowing you to stress less about your investment.
But what should you expect when it comes to the fees of your property management company? Understanding exactly what you’re getting out of your arrangement is important to your investment. Here’s what your fees will likely cover when hiring a professional to assist with your rental units!
Inspecting Your Property & Setting Up Your Account
Some property management companies charge an initial fee for onboarding which can be in the $300-500 range. What this fee will include will vary for every company, but it may include:
- Professional inspection of the property
- Notifying tenants of their new management
- Transfer of all necessary information to the new property manager
If the property management company you’re considering charges an initial fee to onboard you as a client, be clear about what this fee is covering and ensure that it’s a one-time deal.
Monthly Management of Your Rental
Property managers have different ways of structuring their fees for managing the rental from month to month. Understanding these fees and their respective differences can help you know what the best format for you will be.
In a flat fee, you’ll pay the property management company a set amount every month for their services. This number is usually based on the size of the unit as well as what the property manager’s responsibilities are.
In a percentage fee, you’re expected to pay a percentage of the unit’s monthly rent to your property manager. Again, this percentage will vary, typically from 4 percent to 12 percent. You’ll need to clarify with your property manager whether this fee is based on the actual amount of rent collected or the rent that’s due every month.
These fees typically include routine maintenance work, but some property managers may charge an additional amount for extra maintenance that’s not generally included from month to month.
Clarifying the terms of these fees can help you determine if you’ll still be paying the flat fee even if the unit is vacant, or whether or not your percentage is based off of rent collected versus rent due.
Advertising the Unit and Screening Tenants
Sometimes referred to as “tenant placement fees”, these fees could include a flat fee or a percentage of the rent. This amount covers advertising costs, such as for listing the rental online or paying for ads to attract tenants.
Tenant placement fees will also cover the costs to screen tenants—think background and credit checks, which are essential to ensuring you get the right renter for your property and avoid an eviction or other issues later on.
This fee may also cover lease costs, which could include the time and effort it takes to process applications and draft a lease and its respective terms. Know what these fees cover when hiring a property management company!
Are There Other Fees?
Depending on the company you choose and what their policies are, there may be additional fees for additional services.
For example, eviction fees—in which your property manager handles the eviction process—could cover legal expenses and other efforts during an eviction.
Other property management companies will charge a fee for breaking your contract with them. These fees likely won’t be necessary in the beginning when working with the property manager, but knowing their fee structure and policies can help you determine if the company will be a good fit for you in the long run.
Have Questions? Contact Us!
At FAS Management, we’re here to help you make sense of working with a property management company in the nation’s capital. Contact us today at (202) 337-5080 to have us assess your property in Washington DC or to discuss our fee structure as compared to other companies!