Why Using A Flat Fee Property Manager Is A Smart Move
The whole idea behind hiring a Temecula Property Management Company (or a property manager in your area) is to cut down on the responsibilities associated with owning a rental property while still reaping the rewards. A property management company is responsible for screening tenants, collecting rent, scheduling work orders, staying up to date with taxes and accounting, and being knowledgeable about landlord-tenant law. They do all of this so that you don’t have to, and many landlords agree that paying the management fee is well worth the time and energy it saves them.
Some property management companies charge a flat fee while others use a percentage based method. While both have their pros and cons, there are a few reasons why so many California landlords go with a flat fee property manager to handle the everyday responsibilities of their rental:
Flat Fee Vs. Percentage-Based Management Fee: What is the difference?
Property managers charge a fee for all of the services they offer. Flat fee property managers charge one fee that covers all of their services. Their rate is not dependent on the amount of rent the property brings in. These fees are simple, easy to understand, and ideal for first-time landlords who don’t want to be hit with big surprises. Landlords who own property in C class areas will end up paying more than landlords in A class areas, as C class properties typically require more work. Percentage based property management companies will usually charge between 8-12% of the monthly rental income, and some even charge when the property is vacant. This fluctuation can be difficult to predict, and this usually means property management companies are charging more for properties that generate higher rent but are doing the same amount of work across the board.
Flat Fee Property Management Benefits
Property management companies that use a percentage based method may tell landlords what they can expect to pay for property management services based on the current rent, but if the rent changes, so does the property management fee. This can make it hard for landlords to maintain a budget for their rental property.
One of the draws to real estate investment and property management is that you do not have to buy investment property in the same area in which you live. Your property manager will take care of the property when you are not there to do so. A flat fee property manager will charge the same amount for servicing a property in a C class areas as they do in an A class area. This means landlords are free to invest in the types of properties that make sense for them without having to pay more for property management services.
Property management companies that use the flat fee model are typically more landlord friendly than those that use the traditional model. The flat fee model does not penalize landlords for making money and allows landlords to stay in control of their investment budget.
Typical Property Management Fees
Property Management Fees can range from a flat fee of $119 per month all the way up to 10% of your gross rents. Managing an investment property is no small task. Professional property management companies take care of countless tasks for landlords, allowing them to enjoy the passive income without dedicating all of their time and energy to things like:
- Setting, Collecting and Adjusting Rent
- Finding Tenants
- Screening Tenants
- Handling leases
- Handling complaints/emergencies
- Evictions and move outs
- Property maintenance
- Regular and emergency repairs
- Managing the budget/accounting
- Legal issues
- Handling vacancies
- Maintaining records and
- Filing taxes
Many landlords find it well worth it to leave these responsibilities up to the professionals and report that paying a flat fee for the peace of mind that their home is in good hands and that rent is flowing in is well worth it.
Picking the right property management company is a very personal decision, and should be done after careful consideration and asking detailed questions. The right property manager for you will be dedicated to keeping your property in the best condition possible and reducing vacancies. When your property is taken care of, your tenants are happy, and both you and the property manager are getting paid, your real estate investment is on the right track.
Benefit National is a Murrieta & Temecula area Property Manager that provides flat fee management services. Our service areas include Murrieta, Temecula, Winchester, Wildomar, Fallbrook, San Marcos, Lake Elsinore, & Corona.