Rental income to most investors seems like the easiest path to prosperity. This is, however, not the reality since there are various elements involved in property rentals that require expert handling. Professional property management is hence the best choice for investors aiming for considerable profits from their rental properties.
Most investors, however, steer clear of property managers in an attempt to minimize their expenses. The key in cost-efficient expert property management lies in understanding how your management company structures its fees.
Here are the setup options that might apply to your case.
This fee setup is generally used for residential properties with high vacancy rates and land sites that have no regular rental income. Fixed charges are easy to compute and in most instances have no surprise or hidden costs making them easy to plan for. Some agencies have various additional fees for their services. It’s prudent to shop around before settling on a company.
In this structure, you get a fixed rent cost for your property then sub-let it to a property manager. The management agency will charge a higher rent than your fixed cost. The difference in your fixed rent and that charged by the managers makes the latter’s fees for your property’s management. You are guaranteed a hassle-free rental income but usually at a low market rent price.
This is the most prevalent property management fee structure. A rent percentage structure is generally used for residential properties. The property managers will collect rent and manage your property for a specific percentage of the rental income, usually 10-15%.
With a proper understanding of the above structures, you are now well-placed to pick the best for your investment. This way, you can benefit from professional property management without incurring significant losses. Regardless of your choice from the above fee structures, ensure you work with a trustworthy and diligent agency.