Management fees are a common concern of owners when they are looking for professional San Diego property management. Today, we’re talking about what those fees mean.
There are a few common fee structures that San Diego investors can expect to see. First, there is a management fee plus one or two ancillary fees like a leasing fee or a maintenance fee. The second structure includes a small management fee, which may be called a discount fee, but then a lot of other extra fees are charged. Then, the third fee structure is what I call a “here today, gone tomorrow” manager. They charge a super low fee and you wonder how that can be, and the answer is they aren’t managing well, so they’ll be out of business soon.
Typical Property Management San Diego Fees
You need to understand what these fees mean, so we’re listing 10 fees you may run into.
Set Up Fee
This is sometimes charged to set up your account in a property manager’s system.
This fee is the monthly cost that pays for the ongoing management of your property.
This might be to oversee large repair project outside of normal maintenance.
Some companies keep their management fee low but then charge extra for running ads.
The leasing fee is a commission paid once the property is leased to a tenant.
Lease Renewal Fee
Another common fee is the renewal fee, which is what you’ll pay for tenant retention.
When a maintenance fee is charged, the company will get a percentage of every maintenance item that needs to be completed. So, on a $100 repair, they may keep 10 percent.
This could also show up as a postage fee or an accounting fee.
Some property managers will charge you a cancellation fee when you want to be released from your contract.
Pay for Performance
When considering the right fee structure for you, try to keep things simple. It’s also important to pay for performance. As an investor, I’m okay paying a higher management fee because I know the rent will be tied to that fee. So, the manager has an incentive to make sure the rents are high. Leasing fees are also performance based. If a lease is successful, the manager gets a fee. If not, they don’t. I am okay with those fees because goals align with the San Diego owner and the property management company.
If you have any questions about your San Diego rental property, please contact us at Good Life Property Management.