Today we’re talking about what you should expect to pay in Contra Costa County for property management services. There is a wide range of fees being charged by different companies. They are between four percent and 10 percent, generally. A housing provider might be wondering about the difference, and it’s important to understand because your management fee is part of the expenses you pay to maintain your investment property.
Companies that charge a very low monthly management fee also have a lot of additional charges. You need to know what those additional fees are before you get excited about a low management fee. They might charge a fee to put a tenant in the property. This is often called a leasing fee or a placement fee. That might be 25 percent of a month’s rent, or 50 percent or even 100 percent of a month’s rent. Some companies will charge you six percent of a full year’s rent.
When you have a company with a low management fee, you should also look for mark ups on repairs and invoices against the property. They will add two percent to the invoice to cover supervising the improvements to your property.
Ask a property manager if they charge to serve Three Day Notices, if they charge for invoices, and if there is a fee to receive rent electronically. Some companies will charge a renewal fee. When a tenant’s lease expires, that tenant can leave, stay month to month or renew the lease. The process of renewal does take some work, so there might be a renewal fee. At Bruce Croskey, we do not charge a renewal fee. We are happy to have tenants who want to stay and we don’t like having tenant turnover.
Another fee you might come across is the startup fee. That is basically a payment to get your file started and all your systems in place. We don’t charge this fee at Bruce Croskey either.
Don’t confuse all these fees with your reserves. Reserves are in place to fund your trust account so there is money to take care of any problems you may have in the middle of the month. If something breaks between rent cycles, you want to know there are funds to cover the repair.
When you’re getting quotes for management services, make sure you know what is included and what will come with an extra charge. If you have questions, or you’d like to know more about our fee structure, please contact us at Wolfgang Property Management.