Caveats of Using a Property Manager
A property manager is typically purchased tenant placement, ongoing management, or both. check this is usually a onetime fee that varies from 1/3 to some full month's rent. Ongoing management is paid monthly and is normally 5-10% with the rent collected. However, sometimes you can find hidden fees or any other junk fees the manager may charge.
Making profits from repairs
Property management companies probably have their particular in-house repair and maintenance division or a sister company. Their main business may not originate from managing properties, but from making repairs. They can charge outrageous high hourly rates on repair and maintenance. They can also mark up materials without providing you with additional options from which to choose.
Often times they may not permit you to use another contractor. Even worse, they find unnecessary things to repair or replace to make a huge profit your expense. Be sure to negotiate these types of services and be sure they are on the property management agreement. If not, pass this business up and search elsewhere.
Extra charges during property vacancy
There are property managers that do not get paid unless the property is rented. It offers them incentive to obtain your home rented at the earliest opportunity. Some companies impose a fee even if the property is vacant. Some charge exactly the same rate as when the exact property is rented, while some charge significantly lower rates.
On surface of that, they ask you for a fee to find a tenant. Even if the home manager claims no charge during vacancy, there might be a catch. A new tenant of a friend of mine moved in on October 1st along with the house was vacant in September. However, his property manager still charged him full commission for September. The reason he gave was for the reason that lease was signed in September.
Late fee policy
Some property managers collect the entire late fee or the fee for non-sufficient funds. They argue collecting late payments requires extra work. It is true at some level; however it does not make sense for them to profit from it. This is true particularly if those fees are set at the pretty large quantities inside lease agreement.
You might wonder if the manager is attempting to make a simple make money from collecting such fees. In addition, they are the ones who recruited the tenant in the first place! Splitting the fees between owner and property manager, or capping what the manager will keep to your specific amount in the given year, seems more modest and fair.