Generate leads by using free resources such as signs and craigslist but do not prolong the search process in order to save a few advertising dollars. With vacancies time is money.
Property managers may charge a fee whenever they draw up the paperwork to renew a tenant’s lease. This fee is typically anywhere from 0 to 200 dollars. This process is not a lot of work so a big fee should not be necessary.
Reserve Fund Fee
These funds are used to pay everyday operating expenses, making sure that services are performed promptly and bills are paid in a timely manner. A reserve of $200-$500 is average for single family properties.
Will they contact you with an estimate before performing repairs over a predefined amount? Is this negotiable? The policy may be to notify you if an expense exceeds a higher figure like $500-$1,000. You may want to ask if this can be set lower to $100-$200 to start out with an increase over time as you become more familiar with the property management companies judgment.
Do they have their own maintenance or repair crew? Companies that do not offer this may portray it as an ethical hazard since the company could overcharge. If managed properly and the billing rate and process is reasonable then it should not be a problem.
For larger remodeling and upgrading projects, do they act as the general contractor overseeing the work that is done? Is there a fee for this?
This is the fee for this such as serving notices, dealing with attorneys, court appearances, and evictions.
Unpaid Invoice Fee
This is a small service charge, typically 1.5%, that is added each month to all unpaid invoices that are past due.
Bill Payment Fee
This is a fee for making owner payments such as mortgage, insurance, and homeowner association dues.
Sales Commission If Property Is Sold
Management firms may require an exclusive arrangement to broker your properties. Know the brokerage rate and ensure that there is a limited term which will allow you to resist with another firm if the property does not sell within a reasonable period of time. Also, if the firm requires it, how much would the sales commission be in the event that a tenant ends up wanting to purchase the property they are occupying? This is typically 1-3%.
Find out if they will be keeping any portion of the following sources of income:
Returned check fees
Lease violation fees
Interest on security deposits and owner funds held by manager
Income from laundry and vending machines
Extra Duties Fee
Contracts may contain a list of extra services not included in the contract along with the billing rate in the event that the owner requests any of them be performed. Check to see if this clause exists, what services are listed, and what the billing rate is.