You’re probably looking for a management company, otherwise, you probably wouldn’t be reading this blog. So what should you do? Should you just select the company with the cheapest monthly management fee? Probably not, for several reasons.
First, you should take note that the monthly management fee, which can be either a flat rate or a percentage of the rent, is only a part of what you’ll be paying for any management company’s services. Depending on which company you hire, you could also be paying setup fees, marketing fees, mileage, leasing fees, renewal fees, maintenance fees, etc. Some companies even try to hide these fees from you by burying them in the fine print scattered all over the contract.
So if pricing is important to you, it’s necessary to look at the full picture instead of just the management fee. You’ll likely find that a company with a bargain basement management fee has much higher costs for their other fees. This is frequently the case with companies that have a “flat rate” monthly management fee. We see this from some of the franchise operations and the bigger national companies, mostly. They lure you in the door with a $79 flat rate monthly management fee, for example, but then they gouge you with other fees that companies like ours aren’t charging, such as setup fees (in other words, you pay them up front before they’ve even done any work). It may be smart marketing, but it’s also a bit disingenuous, to put it kindly.
But more importantly, is price really the most important factor when you’re talking about someone managing what is probably your most expensive investment asset? Would you hire a mutual fund manager who only charged a 1% fee, but who only earned you 2% a year, instead of hiring someone who charged a 2% fee but who earned you 10% a year? Obviously the latter is the better option, even though he charges double for his services. What you want is expertise. That’s true when you’re hiring someone to manage any of your investments, including real estate. Especially real estate, in fact. It’s important to examine many facets of the management company you’re considering. How long have they been managing property? Do they specialize in property management, or is it just a small side business to their primary sales business? How many properties do they manage? How many employees do they have to look out for you? Are they doing yearly inspections of your property, or do they only see it at move-in and move-out? What sort of tenant screening process do they use? The list goes on and on. It’s important to analyze the total picture of the management company and not just the price. You may find that the least expensive company offers you the worst value.
Give us a call and we’ll be happy to discuss not only our pricing, but also our extensive experience and our full service management product.