Property Management Fee – Always Read the Fine Print of a Contract Before Hiring A Property Manager
Are you thinking about hiring a property management company in Portland Oregon? If so, make sure you take the time to read the “fine print” in their contract and verify their property management fees before choosing to hire them.
Why is this important? The answer is simple. Every year more owners make the mistake of not reading the fine print in a contract before hiring a property management company and they end up spending more money than they thought they would on hidden fees.
About Hidden Fees
Some of the “hidden fees” that a property management company can have included a vacancy fee, set up fee, leasing fee, lease renewal fee, and an advertising/marketing fee.
If you know in advance what fees you can expect to pay before hiring a property management company in Portland Oregon, you will save yourself the time, money and hassle of hiring a company who will overcharge and make you pay more money than you should.
Beware of Fees Galore
Yes, it’s true that some property managers can literally have a fee for everything so you have to protect your best interests and verify what the fees are that you can expect to pay before you hire them.
Some of the other property management fees that are common in the industry include:
Tenant Payment Credit Card Processing Fee
Imagine your tenant decided to pay with a credit card and the property manager implemented a processing fee. Except you are the one paying the fee.
Seriously, some property managers will charge this. Although it is more common with vacation rentals, keep an eye out for this charge and make sure that your property manager eliminates it for you.
Home Owners Association (HOA) Management Fee
Back when the market crashed there were a ton of investors who bought up hundreds, and sometimes thousands, of properties in Phoenix. Many of them were from the east coast and couldn’t pass up the properties because they were “too good of a deal.”
What they didn’t realize was that many of these properties were in an HOA, which comes with a variety of fees just from the HOA alone.
There are some property managers that will charge a fee for this service. This can run anywhere between $25 and $50 every time that they have to file paperwork. Now, add that to the cost of the HOA, which includes tenant registration fees and annual assessment costs and you can see how the charges would add up.
The lesson here is that owners should be careful and make sure that their property manager isn’t going to excessively charge them for services related to the HOA.
Fee for Miles Driven
The importance of this fee will be different for every owner. For example, if your property is right down the street from your manager then you have nothing to worry about, but if you are quite away from your manager then this fee can add up.
In some PMAs you will see verbiage regarding mediation. Most often this cost is split between the owner and property manager.
However, you should still look for this language in your contract because your property manager could try to stick you with this cost.
First and foremost, remember that vendors hired by the property manager charge cleaning fees, not the property manager themselves. Usually, this cost is around $250 dollars.
We work in a well-developed relationship with our vendors and are able to reduce costs due to volume discounts. That is because the vendor knows we will bring them a lot of business, they are willing to drop the cost of the cleaning. This usually helps us keep it about $50 cheaper than it would be for a single owner.
Like cleaning, re-key fees are charged by a vendor, not the property manager. Based on our research, this usually costs anywhere between $100 and $200 for a full re-key. Just like cleaning fees, we are able to reduce these costs for our owners via the volume discount we receive from vendors.
Rental Taxes and Licensing Fees
This fee is for paying the city sales tax and processing monthly tax returns for the owner. Often there will be a charge of about $25 to $50 per property.
Equal Housing Opportunity Fee
This was a unique charge that we found in our research. Essentially, the property management company reserved the right to charge a fee to an owner who requested that the property manager ignore equal housing laws. That charge was around $500 and was also accompanied by a termination of the contract.
Home Warranty Processing Fee
Home warranties can be very difficult to work with as a property manager. Therefore, many property managers reserve the right to charge an additional fee for overseeing the use of the home warranty. Some charge an hourly fee of $25 – $50. We simply charge a flat fee of $45 per order.
We saw this fee twice. Once for $125 and another time for $200. There was no specified reason for this fee, it was simply stated that it was an annual fee. For obvious reasons, we would be wary of any property manager who wanted to charge this fee.
At Rent Portland Homes Professionals, we’re a transparent property management company, this means that we don’t charge excessive fees for everything! When you hire us, you can expect professional property management for an excellent monthly rate.
A Property Manager Will Help You to Invest in Rentals Without Geographic Barriers
Let’s say that you live in Hawaii, but you want to own rentals in Portland, another great thing about hiring a property manager like Rent Portland Homes – Professionals is that you don’t actually have to live in the PDX area to own rentals here.
With our property management team serving your best interests you can have confidence that we’re going to be your “eyes and ears” in Portland so you can rest easy and enjoy the passive income that comes from owning investment properties.
Contact Rent Portland Homes Professionals
To learn more about the professional property management services we can offer you, including our maintenance services, contact us today by calling (503) 447-7735 or click here to connect with us online.