Owners looking for professional New Jersey property management often ask one question first: how much does it cost?
This is an understandable question, and what most owners are really asking is whether professional property management is worth the money they’ll have to spend.
Each company charges their own management fees and structures those costs a little differently. In this market, you may find management companies that charge a flat fee or a percentage of the rent that’s collected. Some management fees will be all-inclusive and others will cover only a few things, and then charge extra for additional services.
Smart investors know that professional property management more than pays for itself; with a good management team, you’ll earn more and spend less on your rental homes. However, you want to make sure you’re paying a fair and competitive price. You also want to stay away from any hidden or surprise fees.
New Jersey Leasing Fees
One of the first fees you’ll encounter is a leasing fee or a tenant placement fee. This covers the cost of renting vacant units to tenants. The leasing fee should include services like:
- Preparing photographs for the listing
- Online advertising
- Responding to tenants who have questions
- Scheduling showings
- Screening potential tenants
- Negotiating the lease agreement
- Conducting a move-in inspection
- Collecting the security deposit, first month’s rent, and other move-in funds
Many management companies will provide these services for a flat fee. Others will charge a percentage of the first month’s rent or sometimes a full month’s rent. Some management companies will also provide leasing services separate from full-service management. This will affect the cost of those services.
New Jersey Property Management Fees
Flat fee management companies will charge one base price every month, regardless of what your property rents for. With a percentage-based model, your property manager will charge a percentage of the rent that’s collected – usually between eight and 12 percent.
Unlike the leasing fee, which is only paid once, the management fee is paid every month. For most owners, it includes rent collection and accounting, lease enforcement and inspections, routine and emergency maintenance coordination, communication with tenants and vendors, legal and regulatory compliance, service of notices and other correspondence, and technology that includes online portals and software.
A competitive property management fee doesn’t only cover services. It also includes the years of experience, the industry expertise, and the continuing education that good property managers bring to the relationship. You’re getting resources and tools that you wouldn’t have if you were managing on your own.
Look for Additional Fees and Costs
Most rental property owners prefer all-inclusive and full-service management plans that cover everything they’ll need as landlords. They know that everything will be taken care of, and they don’t have to worry about paying extra for basic things that are included elsewhere.
Additional fees you may encounter include fees for accounting, inspections, maintenance work, technology, and administrative. There may be eviction fees and filing fees that fall on a property owner. There might be a good reason for these; if the property management fee is very low and only covers a basic scope of service, you’ll have to pay more for additional work. Just make sure everything is explained to you, and transparent in the management agreement.
If you’d like to hear more about New Jersey property management fees, contact us at KeyVest LLC. We can tell you more about our own fees and what you can expect when you work with us.
