When property owners contact us inquiring into Upland property management services, one of their first questions is always “how much will this cost me?” Property owners want to get the best returns from their investments, and it’s only natural that they’ll want to know whether a management company will be worth the money spent.
Fees and rates vary significantly between property management companies, so it’s hard to give a single answer. Instead, let’s start with a ballpark figure, and then look at some of the variables that can influence the cost.
What Does It Cost to Hire an Upland Property Management Company?
So, as a very basic ballpark figure, you can assume a typical property management company will take around 10% of revenues. However, this can vary according to a number of factors.
1 – Vacancy discounts
Many property management companies will only charge ongoing fees for occupied units, and not charge for those which remain unoccupied. Of course, a good property management company is going to seek maximum occupancy, so this discount likely won’t kick in too often. And that’s a good thing for you since high levels of occupancy are one of the main ways a property management company creates value.
2 – Upfront vacancy charges
Sometimes, if a unit has been vacant for a long time, or a property is severely lacking tenants, they may charge upfront fees. This isn’t profit, it’s money intended to spend on advertising and agent commissions to help get those units rented out.
3 – Tenant placement fees
Other property management companies may instead ask a larger fee whenever they get a new tenant, often around 50% of the first month’s rent. However, a good management company won’t double-dip here. They’ll either charge for vacancies or for tenant placement, but not both.
4 – Maintenance costs
Typically, maintenance costs aren’t included in the base fee an Upland property management company charges. However, it’s worth keeping in mind that they usually keep maintenance crews under contract, servicing many different properties in the area. This translates to lower costs for you, compared to hiring out these services yourself on a case-by-case basis.
In short, Upland property management does bring some costs, but those costs will bring better occupancy and more reliable maintenance. For most property owners, this makes hiring a property management company well worth the expense. Contact The Labrada Group to learn more.