When you’re looking for professional property management in Los Angeles, you’re probably going to compare fees. You have to compare the services you’re receiving as well as the fees you’re paying, because property managers will structure things differently. There are a couple of fees you can always expect to see, and a few others that some companies will try to hide. Make sure you know what you’re paying for, and what you’re getting.
Leasing or Placement Fees
The first fee you will often encounter is the leasing fee, or the placement fee. This is what property managers charge to advertise your home, find you a tenant, and put together a lease. It’s typically the equivalent of one month’s rent, or a percentage of that rental amount, although some companies will charge you a flat fee instead. It covers the cost of marketing your home, showing the property, following up with prospective tenants, screening all applications, and getting the lease signed. This is a service that’s well worth it to landlords because it ensures your vacancy time is limited and you get a reliable, well-qualified tenant placed in your home.
Ongoing Management Fees
You’ll also pay a monthly management fee. This will cover things like rent collection, tenant relations, and lease enforcement. All of the day-to-day activities that go into managing a home are part of this fee. Most management companies will charge a percentage of the collected rent. Others will charge a flat fee. You’ll want to find out if your management company charges this fee when the property is vacant, and if you’re still responsible for the monthly management fee even if your tenants don’t pay rent.
Additional or Hidden Fees
No one likes to be surprised, so make sure you work with a management company that’s completely transparent about all its fees and expenses. Some companies will try to hide extra fees, and you’ll be shocked at so many deductions that were taken from your rental income when you get your monthly statement. Look for extra charges for maintenance coordination, administrative fees, and marketing charges. Some companies will charge for inspections, providing statements, and serving notices. These may be valid fees, it’s just important that you know about them ahead of time. Examine the management contract carefully before you sign it.
Property management companies structure their fees and services in different ways. You might be impressed with a low monthly management fee until you find out that it covers almost nothing. Do some homework and make sure you understand what you’re paying for and what you’re receiving.