8 Insider Secrets You Must Know Before Hiring a Tampa Property Management Company
Would you like to save at least $740 a year per rental property? These eight tips will help you to find the right Property Manager and save you money. Prepare to be amazed with the overcharging and hidden fees charged by most Property Management companies.
Avoid National Real Estate Chains Providing Property Management The primary interest of these companies is to sell homes. Property management is normally a small component of their business that generates extra income for the owner/broker and develops future listings when they are ready to sell. Since the vast majority of these companies are franchises, they typically demand a ton of fees and very high commissions in order to pay their franchise fees. You should stick with a local company not affiliated with any larger national brand. The company should specialize in property management and not selling homes in the retail market.
What is the Processing/Application Fee? The right answer should be nothing. However, the majority of companies demand $300-$500 up front to put your rental property into their system. No matter what kind of Property Management software they are using, it should take about five minutes to set up your rental property in the system. For most companies this processing fee is purely profit.
What is the Cost of the Leasing Fee? Many companies will charge 100% of the first month’s rent. I would recommend you pay no more than 50% of the first month’s rent to find a new tenant. There certainly are legitimate costs to finding you a qualified tenant but they do not amount to a full month’s rent. The property manager advertises the property usually by creating a listing on CraigsList, Multiple Listing Service, and various other Internet sites. Signs will also be created and posted at the site of the rental property. The property manager will then screen all of the leads for qualified tenants, show the property and do a thorough background check before receiving the deposit and signing a Lease.
Do You Have to Pay For an Advertising Fee? With the exception of minor costs for signage, you should not have to pay any additional fees for advertising. Unfortunately, there are many companies that charge upwards of $750. Their claim is that the money is needed for advertising in newspapers, magazines, and other paid for advertising. You should take into consideration one significant point, newspapers ads do not give you a high amount of calls for the cost. CraigsList ads now dominate the classified/For Rent market and they are FREE. CraigsList generates up to 8 times as many leads as newspaper ads unless you are in a small, rural area.
Do they Charge You a Late fee? Property Management companies already charge the tenant a fee for late payment, so why should you be penalized? Part of their job is to collect the rent which is why you pay them a management fee. Avoid any company that tries to charge you for a tenant’s mistake.
Can you talk to the Owner of the Company? You should always ask to speak to the owner and get your questions answered directly from them. The owner is generally the only person you can negotiate with and it is always better to hear what you are getting from the horse’s mouth. It is good to casually ask the owner if he or she invests in rental properties. Having a property manager who owns their own properties is a very positive sign. A property manager must believe in his product enough to invest in it.
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