When we speak with new prospective clients, one of the first questions we are always asked is about the cost of our services. How much does property management cost in Grand Rapids? Like everything, it depends, and it’s difficult to compare one company to another. Each management company has its own pricing and service model. Unfortunately, some companies will intentionally appear to be cheaper on the surface, only to surprise you with hidden costs later.
Lower Fees Do Not Equal More Profit
It’s important to remember that while management fees are important, lower fees don’t always mean higher profits for you. There are so many unquantifiable ways that a good property manager can save you money. You don’t save money by paying less, but by avoiding potential expenses and maximizing the performance of your property over time. Your management company is overseeing some of your most important assets and helping you manage your financial goals. You want to align yourself with the best property management company you can find, and not just the cheapest.
Services vs. Costs
Full service property management is when the owner steps away from all day to day management and the property management company handles all activities, acting as the agent for the owner. These activities include marketing, collections, managing the tenant relationship, owner accounting, coordinating maintenance, and anything else related to the property.
Leasing, Management, and Renewal Fees
There are typically three main fees; a leasing fee, a monthly management fee, and a lease renewal fee. The leasing fees are usually 50 percent to 100 percent of one month’s rent. This is assessed as soon as a tenant is placed and a lease is signed. The management fee is effective when a tenant moves in. It can be a percentage of the rent or a flat fee. Typically, it’s between 6 and 12 percent of the monthly rent depending on many factors. If you’re charged a flat fee, there may be additional charges down the road as other services are performed. At Qwest, we charge a percentage of the rent which is all-inclusive. We find this to be simple, easy to understand, and transparent.
The lease renewal fee is also either a flat fee or a percentage of the renewed rent. We often see renewal fees between 10 percent and 50 percent of one month’s rent.
Measuring the Cost of Property Management
The cost of maintenance is the most difficult expense to compare between management companies and can vary greatly. You don’t know what a management company will charge, and it’s hard to know if their rates are fair until you are working with them and repairs are needed. My advice is to get references while interviewing your management company. Talk to their customers and ask. See if they are satisfied with the workmanship that they are receiving, and if the prices are competitive.
Make sure you’re comfortable with your property manager, and remember they are representing you to the public. Ask questions to see if they share your same values and if they are capable to maximize your property’s potential. You need to hire the best property manager for your property, and like all purchases – you get what you pay for. If you’d like to talk further about our services and how we provide property management in Grand Rapids, please contact us at Qwest Property Management.