The job of a property manager is precisely as it sounds — they manage properties. One might tend to confuse them with real estate agents. Their jobs sound similar, with the only difference being that real estate agents deal in selling houses while property managers concentrate on finding good tenants, maintaining the property and collecting rent.
Every property manager needs to have proper knowledge of the local rental market and properly qualify prospective tenants. A San Jose property management company with typically charge between 5-10% of your monthly rental income depending on the type of property they are managing. This cost includes handling the tasks of finding a tenant, rent collection, issuing a lease, maintaining financial records and eviction.
Many people do not have a clear idea of the appropriate fees a property manager can charge them. Here is a list of the common fees that a property manager will take from the rental income on a property they manage.
The management fee accounts for the actual charge that you have to pay each month. This charge refers to the house’s daily administration, such as dealing with tenants, processing and receiving rentals, performing annual property inspections, attending to emergency maintenance requests, and arranging repairs.
Pay careful attention to the contract terms when updating the property management lease. The agreement should specify that you would not be paying for “scheduled rent,” “rent due,” or “rental value,” but only for “rent collected.”
This makes a big difference since some property managers revise the contract language a little bit. Nobody usually notices these tiny twists in the terms, but it can save you from big losses later on.
A rent-collected payment agreement means that you pay a maintenance fee only when you earn any rental revenue and not any other way. If you do not make money, you should not have to pay the property manager either. It is an excellent way of keeping everyone’s priorities in check.
The leasing fee, sometimes also known as the new tenant placement fee, refers to the charge a property manager issues in exchange for leasing a house when it becomes vacant. The cost usually amounts to a certain percentage of the monthly rent, but many companies charge a flat fee irrespective of the rent.
With this fee, the property manager covers the expenses of advertising the house, showing it to potential tenants, screening applications, arranging the contract, and carrying out the move-in inspection.
Lease- Renewal Fee
It is the fee for the extension of the contract for a current resident. Some property managers ignore this fee or charge a portion of the rent.
The cost generally covers the amount of time needed to make any amendments to the lease, including suggesting modifications to the contract and receiving the tenant’s signature.
Valley Management Group has been serving as a leading property management firm for over 40 years now. If anyone is looking to hire a property manager anywhere near San Jose, CA, they can dial 408-286-4200 to know more.