Landlords who are wondering “What does a property manager cost?” are likely feeling a bit overwhelmed with the day-to-day details of their businesses. If you’re like many landlords, you first entered the rental property business with a DIY mindset. As a result, you figured you’d save a lot of money by handling the inspections, marketing, tenant screenings, repairs, and maintenance tasks yourself. But after a while, your to-do list became unmanageable and you started wondering, “What does a property manager cost and will my business still turn a profit?” You can rest assured that your business still be profitable after hiring a property manager. In fact, it may actually be far more profitable than before.
What does a property manager cost?
It’s standard for a property management company to charge a percentage of the monthly rent. However, some companies charge a flat rate instead. Those that charge a percentage typically fall within the eight to 12 percent range. Since you’ll be paying the property manager a percentage of the rent, you won’t have to worry about any upfront fees. However, do keep in mind that you’ll still have to pay for any third-party contractor repair services. Fortunately, this won’t be any more expensive than if you’d hired the contractor yourself—and your property manager will save you the trouble of doing so.
It’s worth your while to hunt around for a property manager who offers multiple pricing options. For example, you might contract with the manager for basic services at a lower percentage rate. These basic services might include rent collection, maintenance coordination, and similar tasks. Or, you might opt for a premium package at a higher percentage. This might include extras like eviction handling and routine property inspections.
If you still want to do most of the work yourself, look for a property manager who offers à la carte services. For example, you might pay one low fee for property marketing, showings, tenant screenings, and similar move-in services.
How can you receive property management services for free?
Not sure whether you really want to pay a property manager? Don’t fret! It may be possible to get their services with little to no impact on your current profits. This is because many landlords undervalue their rental properties. As a result, they don’t make as much from those rentals as they should. An experienced property manager can do a rental analysis. This involves taking a look at the condition of the property itself, the amenities, and the location. The manager will also do a comparative market analysis. Based on that data, the manager might discover that you’re actually undercharging for your rentals.
As a result, you can easily raise your rent the next time the lease is scheduled for renewal or the next time a new tenant moves in. You’ll end up paying the property manager out of the extra money you’re making. So in a way, you’ll be getting the property manager’s services virtually for free.
Are there other ways that a property manager can save you money?
Another way to look at the question, “What does a property manager cost?” is to consider the many ways that a manager can save you money. Many landlords have needless expenses or underperforming rental properties. Some property managers offer financial reporting services. If you opt for this service, you’ll receive monthly reports that break down exactly how much you’re making from each rental. In addition, you’ll see exactly how much each rental is costing you. As a result, you will be able to figure out how to cut needless expenses and boost your profits.
Furthermore, financial reporting can help you make major decisions for your rental business. For example, let’s say you’re thinking of acquiring a new property in a prime location. You want to raise the capital by selling one of your current properties. By checking your monthly financial reports, you can determine which property has consistently underperformed or which costs the most to maintain. You can sell off that property in order to invest in a more profitable rental location.
How else can a property manager make your business more profitable?
In addition to guiding you in making financially advantageous decisions, a property manager can save you money in other ways. For example, property managers often provide property marketing services. These help to reduce the length of time that your property is sitting vacant. And of course, the longer a property is vacant, the more money you’ll lose on it. Furthermore, your property manager will screen tenant applications. He or she can perform credit and background checks. This will help you select a tenant who will keep the property in good condition and pay rent on time.
To find out if you could save money and make your rental business more profitable, get in touch with New Concept Property Management. We offer a free rental analysis to new clients. This analysis allows you to identify smart strategies for boosting your revenue. If you’re still wondering, “What does a property manager cost?” you can learn more by calling our office in Tucson at (520) 305-3950.