Renting out a house or part of a house is one of the common practices followed by mankind for years. It can also be said that renting out a property is the source of earning extra income by sitting at home. By going through this practice, many people extend the part of their existing house or build additional houses by forgiving the rent. All these activities at first seem quite simple to them and they proudly show off their properties in front of those they know, but their happiness is nothing but a bubble that vanishes in a matter of seconds.
Of disappearing I don’t mean that their property disappears or collapses, but I do mean that the problems they face before and after giving up a property for rent shatters their dreams of earning substantial income on the property in a short time period. This is mainly because of the complications of renting the property, because renting the property is not just about allowing someone to stay in your house and pay you the asking rent. There are a lot of formalities which as a landlord should be followed by you, along with this you also have a plethora of responsibilities towards your tenants which should be done by you upon request.
Anyway, all these problems can only be realized by the person who has built an additional property just for the purpose of renting it out, because usually if someone has rented out part of their house, he can easily take care of rental related matters. . But, if a person has developed an additional property, chances are they realize that managing a rent-giving property is everyone’s cup of coffee.
So how to get rid of this problem is the matter of concern among such owners or homeowners. Interestingly, in an effort to provide a solution to such landlords for their problems, there are various property management companies today that take care of all issues related to property rental. These groups or companies are mainly constituted by the group of experts with knowledge in dealing with issues related to the property being rented out.
Types of property management fees: Although the property management fee refers to the amount charged for looking after the rental property, but depending on their needs, the property management companies charge the fee in different formats. Some of them are mentioned below:
1. Monthly Management Fee: This is an understandable term that refers to the payment made each month to the property management company for the services they have rendered. This payment is made for the varied services offered by the group, including collecting rent from tenants, regularly inspecting property, maintaining property, obtaining complaints received from tenants during odd hours, etc. The amount of these fees varies mainly from 7% to 10% of the monthly rent received from tenants.
2. Rental Fees: These fees refer to the investment made in advertising the property, presenting the property to your potential tenants, screening tenants and checking their previous credit score, preparing all legal documents accordingly and various other tasks. These are usually one-time charges and mostly vary from 75% to 100% of the rent for the first month.
3. Maintenance costs: This is mainly the investment made by the company to maintain the condition of your property. As a general rule, this type of fee is mainly invoiced according to terms determined between the property management company and the owner. If the owner takes responsibility for looking after the upkeep of the property, no fees are paid to the group, but in the event the responsibility is passed on the shoulders to the group. Then, according to the terms, conditions and maintenance fees are paid to the group.
4. Late fees: If the tenant is unable to pay the rent on the determined date, in this scenario, the management company can opt to collect the full rent or a certain percentage of the rent on mutually agreed terms.
5. Eviction costs: Sometimes the owner wants his house to be vacated before the end of the contract. In this scenario, the management company can help him get the tenants evicted from the house, either by mutual agreement or through legal process. Depending on the effort and time, the property management company may charge the necessary fee for the same.