While some property management companies don't charge a fee for leasing a vacant property, most will charge a lease fee equivalent to half a month or a month's rent. The rates will depend on several factors, including the level of services needed by the property manager. Otherwise, the property manager will raise money even if the tenants don't pay rent. Managing a vacant property may be more labor intensive for a property management company than when your home is occupied by a tenant because more potential problems may arise.
Where your rental property is located and potential tenants also influence whether or not the property manager is worth the cost. Layoff fees can vary widely and can range from one month of lost income to when the management company is sued for breach of contract. To help minimize these risks, the property manager will need to visit the property at least once a week. Some companies charge a higher monthly management fee, but it can be more inclusive, so don't get carried away with a higher initial fee until you understand what's included.
It's usually a good idea for the landlord to charge the tenant a late payment surcharge if the rent isn't received on time. While a fixed-rate structure may seem like a good deal at first glance, management companies that charge a fixed fee may not be as motivated to maximize their property's rental income. Unless the landlord breaches the property management contract “for good cause, for example, if the manager does not comply with what was agreed in the contract,” violating the property management agreement early will usually result in an early termination fee. Property managers are useful because they manage the property and handle tenants' affairs on behalf of the landlord.
Keep in mind the fact that contractors will likely charge you more and respond less to your repair needs because you can't offer them a lot of future business. An effective property manager can help landlords save time and headaches by responding to tenants promptly and managing the ongoing daily operations of the property. Property management fees will vary depending on a variety of factors, such as the type of property and the services provided.
