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Invest Pro Properties Inc.

How Much Does Property Management Cost for My West Palm Beach Rental?

Today we will cover questions that you should ask a prospective management firm so you know what their management services really cost. Sometimes it can be difficult to compare the true costs of one management company to another. Some companies structure their costs and fees to make them appear to be cheap on the surface, but then hit you with hidden costs and charges later.

Management Fees

While management fees are important to measure, lower fees do not always equate to higher net profits for you. The company you hire will be responsible for one of your biggest assets, so you want to hire the best property managers and not just the cheapest.

Ask what a company charges for the management fee. Some companies charge a percentage of the rent that’s collected and others charge a flat monthly rate. On the surface, the flat rate might appear cheaper. But be aware that most companies will charge that fee even when the property is vacant.

Vacancy Fees

The next question you should ask is whether they have vacancy fees. We find it odd, but some companies will actually expect you to continue paying them even when there is no rent coming in. Make sure the language in the contract reflects that management fees are based on rent that is collected, as opposed to rent that is due. We only get paid when we actually collect rent and you are making money.

Set Up and Termination Fees

Find out if there are set up fees or termination fees. Most property management companies charge $250 to $500 simply for setting up your rental property in their system. This only takes about five minutes to do, so we find these charges ridiculous. We have no set up or termination fees.

Placement Fees

You also want to ask about placement fees. This is another area where a low fee can make you think you’re saving money. However, the costs can be huge. Some companies won’t include advertising in their placement fee, and you either won’t get your home listed on the MLS, or you’ll have to pay extra to have it advertised there. We put all our homes on the MLS and we also guarantee our tenants.

Renewal Commissions

Some property management companies will also charge renewal commissions. With us, there are no renewal commissions no matter how long the tenant stays.

Maintenance Fees

Ask about maintenance coordination fees and repair bill mark-ups. This is a huge profit center for most companies, with as much as 50 percent of their revenue coming from hidden mark-ups. Ask your property management company if they are willing to put in the contract that they won’t charge any mark-ups on your maintenance work.

How Much Does Property Management Cost for My West Palm Beach Rental?Other fees include check processing fees, end of year statement fees, eviction fees and hourly fees that are charged in addition to the management fee if they’re spending extra time on your property. We believe a property management company should be compensated only when they produce results.

If you’d like to hear more about us and how we keep your property management costs low, contact us at InvestPro Properties.