Today’s blog is about Indianapolis area property management companies and the fees they charge. We want to help you understand what management companies charge their clients, and how they do it.
Set Up Fee
One of the first things you may run into with property management companies is a set up fee. This is a fee that a company may charge for each property you bring them to manage. They will tell you that this money covers the staffing required to put your property into their systems and to begin their marketing work on your behalf. We don’t charge this fee at Indiana Property Management Group, but it is very common in the industry.
Lease Up and Management Fees
Lease up fees are also common. When we place a tenant into your property, management companies generally charge a flat lease up fee or a percentage of that first month’s rent. After that, every management company charges a monthly fee. The monthly management fee also might be a flat fee, but it’s usually a percentage of the rent that’s collected for your property every month. If no rent is collected for your rental, no fee is due to the management company.
Some companies will charge repair fees. They might call them something else, but it’s basically an extra charge when repairs are necessary. For example, if a dishwasher goes out and needs to be replaced, that dishwasher might cost $400. In addition to paying the price of the dishwasher, a management company might add 10 percent, or in this case $40 for coordinating that repair. We don’t do that because we see it as part of our job, but it’s something you may run into it.
Fees are generally collected from the rent we receive from your tenant. Rent comes in from the tenant, and then we deduct out any expenses or repairs and then the management fee. The balance of the rent that comes in is sent to you by check or electronic transfer.
At IPMG, we try very hard to keep the fees inexpensive and simple to understand. We know our property owners like costs that are predictable. We also want you to maximize your investment so that you can do more real estate investing.
If you want more information, check out an earlier blog we posted called “What Does an Indianapolis Area Property Management Company Actually Do?” This can explain the services you receive in exchange for your fee. If you have any questions, contact us at Indiana Property Management Group.