There are different types of fees that property managers charge. Property management fees are an important part of hiring a management company, but look at them in the context of the services you’re getting and the quality of those services. The company you hire will be looking after your most significant asset. So, it’s not necessarily in your best interest to hire the market’s low cost leader. Today, we are discussing nine specific fees that managers charge. Some companies might charge other fees, but these nine are pretty common among Georgia property management companies.
Some companies charge a setup fee, which is an upfront payment made to the property manager to pay for marketing photography and listing services, inspections, and the cost of signage.
Make Ready Fee
Some companies will charge a make ready fee. It’s charged to oversee the make ready process for your house. It includes painting, cleaning, lawn maintenance, carpet cleaning, and other services. It can be a percentage of your rent, or a flat fee.
This fee covers the activities that go into placing a highly qualified tenant in your property. It might cover advertising expenses, leasing commissions, tenant screening, and move-in inspections. It might be a flat fee or percentage of the first month’s rent.
The management fee is paid every month and covers numerous services like coordinating maintenance, handling tenant issues such as evictions, and HOA violations. It includes collecting the rent and getting you your money. It can be a flat fee or a percentage.
There are three types of property inspections; drive by inspections where you survey the outside of the house, the inspection where you pop into the house and look quickly for lease violations, and full blown one hour plus inspections of every aspect of the property. The first two inspections will help you identify maintenance issues and lease violations. The third type of inspection is meant to find latent issues that no one is aware of and can cause serious problems if they aren’t addressed.
Insurance Claim Assistance Fee
If you have a significant loss, your manager may get in involved in repairs and other issues like getting bids for work, meeting with insurance adjusters, and following up to make sure all repairs are done to code. This can be a flat fee or a percentage of the total cost of the claim.
If an issue must be settled in a court of law, the owner may be responsible for all or part of the legal fees. These can include court costs, attorney fees, sheriff fees, and fines imposed by the court. It’s important you understand the legal fees you’re responsible for and which one your property manager is responsible for.
These are charges for renewing an existing lease. Property managers must research rental rates and negotiate an increase in rent. It covers the drawing up of the new lease, and getting the new lease and any addendum signed. Sometimes, property inspections are also involved. Like other fees, this can be a flat fee or a percentage of the renewal rate.
Some companies charge fees to their clients when there is a repair required at the home. In Georgia, these fees are legal as long as they are fully disclosed to the client. They can be markups on invoices. There also may be referrals paid back to the property manager from a vendor and charged through a separate billing system. It’s important that the property owner carefully read the management agreement to determine what, if any, maintenance fees they’ll pay.
If you are interested in learning more about our cost of services, please contact us at Haas Properties. We’d be happy to tailor a program that meets your needs.