Listing a rental property with a property management services:
Are you in the market for listing a rental property with a property management service…Here are several items to consider when listing a rental property with a property management services.
First what are you looking for them to do on your behalf. Are you a local owner or distant (out of state or out of country). Are you wanting to know your tenants or be unknown to your tenants. Are you looking to keep expenses in check or looking to stay separated from your rental and tenants and incur whatever expenses necessary to keep separated from your rental. How long are you looking to keep the property as a rental and what are your goals both short and long term for the property. These are just a few questions to ask yourself when selecting the right property management service to meet your specific needs.
Each situation will have a different outcome based on your needs. Owners looking to be more involved with a property can reduce their overall expenditures as well as increase their profits year after year, where as owners needing daily/monthly management services will give up some of their profits (due to monthly fees incurred) to have the property managed fully during the lease terms. Also, many services offer basic services as a flat fee or partial services for an established free. If you are an owner who wants a service to address all aspects for you for the complete term of the rental agreement this will be the most expensive (monthly and annual fees, etc.) and at the same time keep you out of the day to day, month to month aspects of the property, but always keep in mind paying additional monthly/annual fees may not turn out to be the most cost effective and the longer you have a property managed full time the lower the overall profits on the investment will be.
An example would be if you have a rental property for $1000 a month and select full property management services you will pay both annual and monthly (7-10% monthly) fee’s, you will incur approximately ($1700-$2000) fees on an annual basis. If you have the property for five years this can range from fees of anywhere from ($8500-$10,000) for the five year term. Vs if you select just partial services and do not require monthly services this will decrease your expenditures anywhere from ($700-1000) annually and from ($3500-$5,000) over the five year period. Again it just comes down to what services an owner feels are essential vs which ones they may not require can make a significant difference on the outcome of expenses. This really impact a long term owner as each year these costs rise and additional fees can also be incurred based on company and services they charge separately for.
Always call to discuss your needs in person as well as to establish all services and fees charged before securing any management services for your rental property. The better prepared you are up front the more successful your investment property will be for you.
These are just a few things to consider as you decide what type of services best fit your needs both in the short term as well as the long term. Also, review all blog postings here for Property Management as many questions you have may be just a click away.
Stay tuned for additional postings on this topic and many others in the weeks/months to come.
Also, feel free to call us directly with any questions that you may have.