Monthly Management Fees
General fee landlords pay for another party to manage their rental for monthly actions. Rent collection, updating records and coordinating maintenance. Excluding leasing events.
Flat rates. Too good?
Modern trends in property management are flat rates. They seem almost too good to be true. Well, they are.
Remember that traditional firms have a lot of overhead. Therefore, those fees have to come from somewhere.
Expect management firms to charge 8-10% of monthly rent. Or, a $50-100 flat rate.
Monthly rates are comparable to traditional management fees. However, Co-Managers have practically zero overhead. Thus, eliminating the risk of hidden fees.
Co-Managers only earn a fee when rent is paid. If rent isn’t paid, no fees are earned.
Expect Co-Managers to charge 6-10% of monthly rent. Or, $50-100 flat rate.
Late fees and collections.
Tenants do not always pay rent on-time. Risk landlords take. What happens when tenants finally pay plus their late fees?
Pay for their tenants risk
Traditional management takes pride in keeping the late fees. Stating ‘it requires additional work’ to justify keeping your late fees. Additional work from tenants they selected…
Ideally there are never late fees. It does happen. Expect traditional managers to keep all late fees, few allow landlords to keep half. Rare are those who let the landlord keep the fees.
Your risk, your fees
Since everything is negotiable, landlords can negotiate to keep all late fees. And since payments are funneled through Burbz, landlords set the late fees split.
To lease, or not to lease
Finding new tenants when the old move out. Leasing services often include inspections, screenings, showings and coordinating the lease agreement.
Half their income, no risk.
Leasing fees are typically one-full month’s rent. Simply stated: they keep the first rent check.
This equates to nearly half of their annual income from a rental unit. Thus misalignment between what is best for the landlord vs. management firm.
Landlords prefer no or little tenant turnover. Management firms prefer to double their income. Expect a higher frequency of tenant turnover.
Oh, management also earns their full leasing fee regardless how long it takes to fill the unit. Hopefully it is an immediate turnaround. The longer it sits vacant, the more profit landlords lose.
Don’t worry, your management firm will still earn their full rate.
Minimize vacancy and risk
Landlords have ultimate say to renew a lease or raise rent. Most landlords prefer to minimize turnover and not raise rents. After all, it costs more to fix and turnover a unit than raised rent usually earns.
Co-Managers leasing rates can be negotiated. More flexibility means landlords can ask their co-manager to assist with showings or access, while letting the landlord take on more leasing responsibilities.
Expect your leasing budget to range from zero to full-month rent. Depends on the services co-managers provide.
Maintenance avoidance and expenses
Every property has required maintenance issues. Quality of service is determined by how those issues are handled. And if they even needed to be handled…
Maintenance expenses, expenses, expenses
What’s the leading cause for landlords firing their property managers? Maintenance expenses. And the lack of avoidance.
Remember those hidden fees we alluded to earlier? Here is a common recoup fee. All maintenance requests funnel only through the management company. Landlords are surprised when they realize their monthly rent checks are not the full amount. Since management controls your money, they pay their vendors immediately and give no opportunity for landlords to refute.
Traditional property management will state their network of contractors as a positive. Alluding to a potential discount because of their larger volume. There’s no discount. If there is, it’s paid behind the scene to the property management firm.
Co-Management allows landlords complete transparency about maintenance tickets. Allowing landlords to determine: should issue be deferred, which contractor to use, or if the landlord wants to self-perform.
Co-manager’s may not have the same network of contractors as a traditional property management firm does. Co-management does have flexibility and allows landlords to select their own contractors.
Expect less trip charges. While maintenance issues might be the same, the ability to defer or self-perform significantly lower maintenance expenses overall.
$99 Light bulb change
Sounds extreme. Yet it happens with traditional property management firms.
Traditional property management companies’ solution is sending a handyman out for everything. Even a simple light bulb change. Plenty of horror stories found online.
Co-Management’s focus on transparency is to eliminate these avoidable excessive maintenance fees. Solved by informing landlords of all maintenance tickets. Solved by having hyperlocal co-managers who know great quality service is handling small issues like these.
Avoid these excessive maintenance fees by hiring a co-manager instead.
Interested in getting co-management proposals?
Interview. Hire. Co-Manage.
Request proposals. Interview. Hire. Co-Manage.
Start today by filling out our Request For Proposal form. Describe the services you seek assistance with. The first step to managing differently and in control.