Potential property management customers often bring up management fees, wanting to know how much professional property management will cost. This is understandable; cost is an important factor in deciding who you will trust with managing your investment.
But, I would rather talk about the value of the property management service. As a customer, if you don’t know what we are providing for our cost, then it’s impossible for you to understand where the value lays.
Property Management Fees and Services
Typically, our management fees are around 10 percent of the collected rent per month. Sometimes, we have discussions with potential customers who are comparing us to other companies that may charge only 8 percent or a flat fee. This would be easy if we were doing the exact same things for the money. Then, you could compare and choose the company that’s giving you the lowest price. Unfortunately, not all management companies are the same. Therefore, you need a clear understanding about what the management company is doing for the money you’re paying.
Low Cost Management Companies May Actually Cost You More
For example, at Gulf Coast Property Management, we don’t charge anything when a property is vacant. There’s no vacancy fee, and we don’t charge for performing inspections. Included in our management fee are three inspections per year. Other companies that charge less may not be performing inspections at all, or, they’re going to charge you every time they do one.
You have to drill down into the level of service you need. Then, you can compare the overall cost. It’s expensive to choose the wrong property management company. For most of the properties we manage, our fees come out to about $160 per month. To go from a 10 percent management fee to an 8 percent management fee, the difference is about $30. That may mean the world to someone, or it may not. You have to decide if you’re prepared to compromise the standard of property management service for $30. You can also calculate how much the additional fees charged by other management companies will cost you.
There are lots of formulas associated with property management fees. So, don’t use the fee as your guiding light. Determine what type of service you’re looking for, and make a decision that’s best for you.
If you’d like more information about our fees or the property management services we provide in Sarasota and Manatee counties, please contact us at Gulf Coast Property Management.