How Much Does Property Management Cost?

Hiring a property management company is usually more cost effective than expected. Once you factor in the savings your property manager is producing and calculate the highest best use of your time, hiring a property manager is an easy decision.

If you are unclear on what a property manager does, typically property management includes rental advertising, collecting rent and security deposit, bookkeeping, coordinating vendors, and resident relations.  

How Much Does Property Management Cost?

Typical Property Management Fee

Expect to pay between 5-10% gross rent for full service property management services.  

Providing an exact figure is difficult for 2 reasons: 

1) Property management firms are structured differently, and 

2) The price will vary depending on what services you require, the type of property you own, and where your property is located.

Property Management Firm Pricing Structures

  • Percentage of Monthly Rent: This is the most common fee structure.  The going rate in the Puget Sound region ranges between 5-9% income for full service property management services. The benefit of this structure is you do not pay if your property is vacant. Additionally, the percentage property management fee structure aligns your interest with the manager's interest; The more money the manager earns for you, the more money the manager earns for his/her self as well.
  • Flat-fee: Other property management companies will charge a simple monthly management fee.  One benefit is the expense line is stable resulting in a stable property budget throughout the year.

In general, the lower the monthly management fee is, the higher the additional management fees will be.

For answers to more questions, please visit Sagareus Property Management Services featuring Property Owner FAQs. 

Other Property Management Fees

When reviewing and comparing property management proposals, watch the fine print around other fees. None of these are negative on their own, but be sure you understand the actual monthly and annual amount you are paying for the service.  

Common Fees include:

  • Lease Up Fee

A lease up fee is the amount a property manager charges a client to establish market rent, advertise, show, screen, negotiate + sign a lease, and finally move in a new resident.  Sometimes, Investors will simply hire a property management company to do the Lease Up portion and handle the monthly management themselves. 
  • Renewal Fee

A renewal fee is the amount a property manager charges a client to update market rent, post notice of rent increase, negotiate + sign a renewed lease.  This fee is typically much lower than the full lease up. 

  • Marketing Fee

A marketing fee is the amount a property manager bills back to the owner to cover marketing expenses, usually including professional photos, signage, and print materials. 
  • Eviction Fee

An eviction fee is the amount a property manager would charge the owner IN ADDITION to the cost of the eviction itself. 

  • Late Payment Fee

A late payment fee is the property manager's share of the late fee collected from residents with past due rent. Some property management firms require a share of these fees, while others do not collect any.

Sagareus Property Management Fees

Sagareus Management fee structure is the clients choice between to options:

  • Option 1 - 8% Gross Rent, all inclusive with no additional fees. 
  • Option 2 - $150/mo per every 2 units + 1/2 to 1 month rent per lease. 

Option 1 stabilizes expense throughout the management cycle without a major expense at turn over. 

Option 2 offers owners a lower monthly rate with a larger cost at turn over. Properties with low turn over benefit from Option 2.

Sagareus Management Fee Discounts

The following individuals are eligible to be reduced to firm minimums despite any other factor.

  • Active Investors - Are PreQualified Buyers looking to acquire at least $500k in Assets per year.
  • Veterans - Anyone who purchased their property with a VA Loan.

 


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