You will find many people who prefer to buy and hold properties as a type of investment. Most of them decide pretty early in life that managing their own rental properties is not something of great value for their precious time and effort. This is especially applicable for those people who have properties in some other country or outside their geographical region. Although there are advantages and disadvantages of managing your own properties, it finally boils down to personal capacities and preferences.
Some of the Basics of Property Management
There are many investors who prefer to outsource the property management job to a specialized property management company like http://4rooms.com.au. If you are also planning to hire the services of such a company, but lack the knowledge of how these companies operate, here are some of the basics of property management.
- Leasing: When you wish to hire a property management company to deal with all of your own properties and manage them accordingly, you need to know how much they actually charge to place a new tenant in your property. This normally ranges from the rent of half a month up to a rent of a whole month. It will also be a great idea for you to try and find out how they intend to advertise for your property to attract tenants. It is important for you to remember that a property manager with a lower leasing fee may not be too eager to spend as much on the advertising.
- Management Fee: When it comes to the management fee, it is important for you to remember that property managers normally charge a specific monthly percentage for the job. This usually ranges from 8% to 10% of the gross monthly rent. Here, you need to ask the manager whether this fee will be charged against the actual rent collected or whether it will be charged monthly irrespective of the fact whether the tenant is in the property or not. You also need to clarify with the manager the type of services that will be included in the fee.
- Renewal Fee: This fee is normally charged by most of the property managers to deal with all the paperwork that are associated with contract renewal for the tenant for another year or even more. This fee ranges from a few hundred dollars to the rent of half a month. Most of you may think that this is an unnecessary fee. However, if you look at it from the other way, a few hundred dollars can save you thousands of dollars in turn-over expenses and vacancies.
- Eviction Fee: When you talk about the eviction fee, it is generally associated with filing the eviction and dealing with the corresponding court proceedings. This fee basically varies from one property manager to another. There are some property managers who pass on the actual filing costs, but include eviction as part of their basic management services. On the other hand, there are a few managers who charge a few hundred dollars to deal with the eviction.