How Much do Property Managers Charge?

Alright, how much do property management companies charge to manage property? That's the subject of this video blog. This is the second time that I am addressing this issue in the last couple years. It's one of the first and number one questions that we get from investors who call inquiring about management services. So, um, not an easy straightforward answer, and we're going to address some of the reasons why today. It's a little bit like walking onto a car lot and asking how much a vehicle costs. First of all, we need to know what vehicle you want and what options you want in the vehicle. With our company, Centurion Real Estate Management, we take into account between 17 to 20 different criteria in evaluating how much it will take to manage that property. And that's the, the cost drivers— things like location of the property, the proximity to our office, the number of units, the rent amount that's charged. All of those and many more are factors that we look at when we look at setting the management price. Also, we take into account the resources that are gonna be needed to effectively manage that property to drive revenue to the bottom line for our clients. Some companies go with a, a flat rate or a per-door rate, and sometimes they charge that regardless of being occupied or not. Others will charge a percentage. Generally speaking, if you just did a Google search, you'll see that the national average for management fees is somewhere between the range of 8 to 12%, and that really does hold true. But on larger properties, you can see a little bit less than that depending on several different variables: the rent price and again location. Whether there's an on-site manager, but again, that goes into the expense of management. So, and then with the property management fees, those who charge a percentage of gross receipts, you're gonna see some that include all of their services, some that charge additional for some of the one-offs that happen on a property, things like eviction. If you're gonna file eviction for a tenant on behalf of the owner of the property, those— some management companies will include those in their service. Fee. Others will charge those as additional. I think that it will really depend on your needs and the property's needs. Sometimes the all-inclusive will be the best route to go, and sometimes the use as you need is more cost-effective. But sometimes property management companies either offer one or the other. So shopping around and doing your due diligence is going to be very important when evaluating property management companies. The other thing is, is to really take into account the reputation of the company, the overall services that they provide, the resources. There's certainly a lot of smaller companies or mom-and-pop shops that are able to offer— have low overhead and are able to offer very low fees. But then they don't have the resources to manage effectively, and so they don't drive a lot of results. You're going to be dealing with higher vacancy, improperly or not thoroughly screened tenants, and they don't have the staffing needed. They don't have an in-house maintenance department. We don't— here at Centurion, we don't strive to be the cheapest. We just strive to be the best. We believe that driving results to the bottom line is the most important. We're taking care of our owners, our clients. It's the most valuable asset that an owner has, and we want to provide cash flow in the short term and preserve value for the long term and drive appreciation as well. Let's try that again. As we like to say around here, enjoy life and leave the management to us. Happy investing.