Flexibility and passive income are two hallmarks of owning rental properties. Many owners choose to hire property managers to ensure their passive income truly stays passive.
But what will it cost?
There are several expenses you may not have considered when it comes to hiring a property manager. Though it’s nice to have someone else in charge of your property, you should make sure you have a clear picture of all of the possible associated fees:
Property managers must be onboarded to their new responsibilities. Setup fees cover the upfront costs of taking over management.
Not all property managers charge setup fees, but you should be aware of this possible cost.
As vacation renters come and go, this management fee ensures your property manager stays ahead of each new guest: cleaning, redecorating and making sure your property remains in great shape.
For longer-term rentals, management fees are the investment to keep property managers available around the clock for any issue that may arise. You’ll typically pay these monthly.
When a manager finds and vets new tenants, they ask for placing fees. These can be 75% to 100% of the first month’s rent.
If you have a tenant who needs to be evicted, expect that your property manager will also charge for handling that complicated process. There may also be lease renewal fees for existing residents.
The unfortunate truth about owning a property: Something eventually needs repair. When you have a property manager, they’ll typically take care of the details of fixing it — but you’ll pay for those repairs, plus their time.
Maintenance fees are paid to ensure your property stays livable, functional and beautiful for all future tenants and guests.
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