Not all fees are created equal…so what are the average property management fees?
So really, I think there are two main types of fees we need to talk about.
One is what is a management fee? And there are two types of those. And the other one is kind of the other fees that are associated with property management. There are really two types of management fees.
One is a percentage-based management fee
Meaning a property manager collects money for…that’s a percentage of the rent they collect. A lotta times, you see somewhere between 8% to 10% for this number. A lot of it depends on some of the other fees that they charge, but in general, 8% to 10%.
Now, at gkhouses, we do a flat management fee, meaning we don’t care how much the house rents for. What we care about is just charging a monthly, flat fee. And so generally, it’s cheaper than a percentage.
You know, if you had a $1,500 house or a $1,000 house, the change in management wasn’t that much. And so we felt like it was just fair to charge you for what we were working for, and it didn’t make sense that 10% of $1,500 was $150, and 10% of $1,000 was just $100.
We aren’t working anymore for the $1,500 house than the $1,000 house, so we charge a flat fee. So there’s a percentage and flat.
The next thing is all the ancillary fees that property managers charge. Two of those I’m going to talk about today. First one is a leasing fee. So generally, property managers charge a fee when they rent the property.
So this goes for all the marketing, the showing of the houses, the underwriting of the applications, and then choosing an appropriate tenant for your house. That’s a leasing fee. Sometimes, people call it a procurement fee.
The second one is a markup on maintenance
A lot of property managers will charge a markup on the maintenance that they do to handle that maintenance and deal with the vendors and those types of things.
So today’s questions is, “What are the average property management fees?” I’m Matthew Whitaker. I hope that helps.