Cost-Benefit Analysis: The Structure of Property Management Fees

Property management companies can be a real lifesaver to landlords who need help. Their knowledge and experience can turn the vast majority of tough situations into easily manageable tasks, and they can truly make your life and job easier. Although, of course, you will also need to pay them for their help.

Management fees can vary from company to company or manager to manager, and it’s essential that you understand how much you’ll expect to be paying before you sign any contracts or make any deals.

Some landlords may wonder if paying for management help is worth the cost. What’re you paying for, and is it worth the money?

What Property Managers Typically Charge for

Before you learn what property management companies charge, it’s important to know that every company is different and may have its own way of charging its clients. Always contact your prospective property manager and ask about their specific fees to know what you are getting into.

Some management companies charge their clients a fixed fee that covers all of their services. A fixed price will simply be an already set amount that you have to pay every month, rather than something that changes depending on what your property manager does.

Besides a fixed fee, your property manager may choose to instead take a small percentage of your tenants’ monthly rent payments.

Typically, if they do not charge a fixed rate, a standard property management company will charge you for the following things:

An Initial Setup Fee. Some companies may charge a fee for initially setting up your account with their company. Not every company charges a setup fee. This service may also include things like inspecting your property’s initial conditions and alerting your current tenants that they will be taking care of their property.

A Monthly Fee. As mentioned, most property managers will charge a monthly fee that you’ll need to pay. This fee may be a fixed rate, or it may depend on your income from your tenants’ rent. Some companies may include different things in their monthly management service, so it would be best to familiarise yourself with what you should expect from their help.

The following items in this list may or may not be included in your property management company’s monthly services, so they may cost extra.

Maintenance Fees. Maintenance services often include things like keeping the property clean, dealing with snow buildup, clearing away fallen leaves and anything else that involves keeping your properties neat and clean. Extra work that must be done, like important repairs that call for finding qualified tradespeople in the area, may cost you more.

Tenant Placement Or Eviction Fees. Fees that involve finding and placing tenants into your properties may include costs to cover marketing for tenants, vetting potential renters, helping them move in and so on. You may also be charged if your property management company needs to evict or remove any of your tenants.

Contract Termination Fee. If you have a contract with your property manager to work with them for a set period and you terminate the contract before planned, you may be charged for doing so. Your contract will more than likely have the potential fee explained for you.

Are The Fees Worth It?

As expected, your management company may charge you for various services. So, you may be wondering, is the money worth it?

To put it simply, yes! While your situation may differ from others, most landlords find that an experienced property manager’s help is significantly beneficial. Their help can make your job much easier and less stressful, improving your overall quality of life.

Keep these takeaways in mind as you look for an affordable and useful property management company:

  • Your management company could charge a fixed monthly fee that does not change, or they could charge a rate based on the rent you collect from your tenants.
  • Not every management company is the same, and many have their own way of charging their clients. Absolutely always check how your company charges for their services before you agree to pay.
  • Most landlords find that having a skilled property manager to help them is well worth the money they cost.

Looking For A Helpful Property Manager In New Zealand? Come Speak With Us Today!

As one of Auckland’s leading property management companies, Harper Properties is here and ready to help property owners just like you. Our friendly team of managers has many years of combined experience, and we’d love to use it to make your job – and life – better.

We do our absolute best to ensure you are completely satisfied with our services, and we’d be delighted to talk with you about how we can help. If you have any questions or want to start working with us today, you can easily reach us through our website’s contact page or at 09 361 2810.

Our Harper Properties team looks forward to showing you just how helpful skilled property managers can be!