A property management company such as Tucson Property Management provides perks such as tenant negotiations, maintenance and repairs, tenant retention, paperwork tracking, income reports, and many other great features. But many aspiring and current landlords ask perhaps the most important big picture question of hiring property management- what does it cost?
There is no universal standard for property management costs, something that is far more standardized with real estate agent’s 6% commission rates. There is a lot more fluctuation with property management. A new landlord wants a fair price, but not one that will make their properties a low priority or attract mediocre management.
The Ballpark Rate
Notably, property management will typically come in the range of 6% to 12% of rent amount. This is quite a range, so it is important to find a number that is suitable. The location of the property will help determine this rate, as well as the city. Research the competition and ask around. A common practice is to choose property management that lies in the middle, riding of the lowest price and omitting the highest price. Of course, there are variables such as budget and the features provided by the management firm.
Flat or Variable
Determining the final number requires a studious approach. One of the biggest divisions comes in the variable price or the flat rate. Variable will typically mean that a property management company will charge more depending on the amount of work they do. For example, a tenant turnover oversight will require an additional cost. If a tenant is quiet, pays on time, and calls infrequently for maintenance, the cost will be low.
A flat rate is standard, and the management company will commit to all promised tasks with no or few price fluctuations. Truthfully, there are pros and cons to both approaches. The choice will depend on the landlord’s confidence to handle problems, as well as the number of management tasks included in that flat rate.
A landlord may want to pay more to get higher quality maintenance. Like many other industries, the higher the pay the better the service. 10% of gross rents is a fair rate from Tucson Property Management that is becoming increasingly commonplace. Get more information HERE.
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