One of the biggest things you need to know about Arizona is that there are no specific rules dictating what property managers can charge. So, you’ll see a number of different percentages and flat fees for various types of services. You might see leasing commissions, advertising fees and lock box charges. It’s important that you understand what you’re paying for and make sure you’re getting a good deal once you add everything up.
Across the nation, the average charge seems to be 10 percent of the monthly rent. We don’t see that kind of average here in the greater Phoenix area. The cost is more fee based, so take a look at what you’re paying and compare prices. Shop around and ask for specifics because you don’t want any surprises.
Flat Fee vs. Percentages
Some property managers will charge a percentage of your rental income as a management fee. At HomeQwik, we charge a flat fee. One of the reasons is that a more expensive house is generally a lot easier to manage. So if you’re getting $1,500 or more in rent every month, you’re getting better tenants who are financially responsible and able to handle minor maintenance issues on their own. Sometimes they’re pickier, but they pay rent and they aren’t late and they take better care of the home. So why would we charge $150 for that rental and only $75 on a $750 per month home that is probably taking a lot more of our time? We like a flat fee because we think it’s easier.
Watch out for hidden fees. Everything should be explained clearly in your management agreement. At HomeQwik, we have an annual fee at the end of the year. There aren’t any set up fees. There is a one-time advertising and marketing charge when we’re trying to lease your house. Otherwise, our property owners pay us one flat cheap fee every single month. There are no surprises with our contract. Whoever you hire should operate the same way.
Ask for a copy of the contract before you hire a property manager. You’re paying for a service and this is a challenging business. Professional property managers deserve what they’re asking; just make sure you understand the costs.
If you have any questions about the cost of property management, contact us at HomeQwik Property Management, and we’d be happy to tell you more.