Property management fees are usually what a new owner wants to discuss first when we meet. So today, we’re spending some time talking about fees and what you can expect to pay.
Rental Management Fees: Six to 12 Percent
In short, we charge between six and 12 percent at Reeder Asset Management. That sounds like a wide range, so we’ll tell you how we came up with that.
We have developed a scorecard or a spreadsheet, where we input a number of values and receive a rate based on those values. It’s simple math, and it helps us accurately set a price for our services. There are three things that go into this scorecard.
Proximity to Office
We have offices in 4 locations, so we’re prepared to serve everyone in the area. But sometimes there’s a property on a farm on the outskirts of the county that needs management help. The time to get from our office to that property is important. So, someone with an older farm home on the outskirts of town will pay around 12 percent for professional management.
Age of Property
It generally goes without saying that older properties require more maintenance. If your home was built in the late 1800s, but it’s still within the sphere of close proximity, your management fees will probably be in the 10 percent range.
Number of Units
If you bring us a 10-plex close to our office, it’s easier to manage than if you have 10 properties scattered across the county. So, that will result in a lower management fee. You’d probably be in the six percent range.
If you have a home built in last 15 or 20 years, and it doesn’t require a lot of maintenance, you’ll be in the eight percent rage. If the property is older and further away, you’ll be closer to 10 percent.
All these factors are considered. It may be hard for me to tell you instantly what the management fee will be, but I can give you a range based on the information you share.