Rental property owners rely on property managers to assist them in finding high-quality residents, conducting background checks, and addressing maintenance issues. Owning rental properties can be rewarding but requires more time and effort than many landlords anticipate. Hiring a property manager can free you up to concentrate on other aspects of expanding your business.
A question that many owners and landlords in the Detroit market have is this: How much should I expect to pay for property management?
Several factors will affect your total costs, including location, the type of rental unit, and the number of services provided. In this article, we’ll compare the fees for seven different property management companies in Detroit to help you figure out what to expect regarding leasing and property management fees in this area.
Leasing Fees for Detroit Landlords
How much does it cost to hire a property manager in Detroit? The price is determined not only by where you live but also by other factors such as the kind of property and the extent to which services are offered. These can include:
marketing the property,
holding showings,
screening applicants, and
preparing the lease agreement.
Some landlords hire a property manager temporarily to help them find a renter, opting to take over the day-to-day management themselves.
Leasing fees can be flat but are generally calculated as a percentage of the first month’s rent. The Detroit area’s average leasing fee ranges from $250-1000 or 50-100% of the first month’s rent.
Many property management companies offer discounts on the leasing fee if you choose a higher membership tier that offers more services. For example, Evernest doesn’t charge a leasing fee for the Platinum tier.
Fixed vs. Percentage-based Fees in Detroit
Most property managers will charge you a monthly fee to handle the ongoing management of your rental. But don’t simply go with the cheapest option; you should look at what services are included in the price to see if it’s a good investment for your business.
Depending on the company, the property management fee may be a flat fee or a percentage of the rent. A flat fee is a set amount of money you pay each month; a percentage fee is a percentage of your monthly rent.
In Detroit, flat monthly fees generally range from $89-179, whereas percentage fees range from 6-12%. These fees vary depending on various factors, including your rental rate, the type of property you have, and the scope of services provided.
Repairs and Maintenance Fees
Property management companies will take care of repairs and general upkeep of your property. It may be cheaper to hire a property manager because they will likely have relationships with local vendors and contractors, allowing them to get a better deal than you could.
Property management companies typically coordinate how these problems are fixed regarding specific repairs. Most companies require landlords to keep at least a certain amount of money set aside for repairs. Your property management agreement will say how much you need to keep in your reserve repair fund and how you can give permission to use these funds.
Leasing Renewal Fees
A lease renewal fee pays for negotiating with current residents and filling out the paperwork for additional lease terms. Again, this fee can be a flat or a certain percentage of the monthly rent. Some property managers will not charge you to renew your lease.
Vacant Unit Fees
If your vacant unit is vacant, your property manager may charge you a monthly fee. This vacant unit fee covers the cost of inspecting your property regularly while it is vacant. This is because when a property is unoccupied, it is required by law to be inspected regularly to meet the terms of insurance policies and ensure the building maintains its integrity and safety.
Eviction Fees
The fact of the matter is you may have to evict a resident at some point as a landlord. Your property manager can help you through this process. Some will charge an extra fee, while others will give you an eviction guarantee if you pay for a higher membership tier.
For example, at Evernest, eviction protection is included in our Platinum pricing plan. Still, landlords can also purchase an eviction protection plan as an add-on for an annual rate of $200.
Routine Inspection Fees
Routine inspections are important to ensure your resident is keeping your rental in good shape and to find problems before they worsen and cost more to fix. Most property management companies will charge a fee for inspections that are done regularly or when a resident moves out.
At Evernest, each pricing plan includes move-in inspections, move-out inspections, and monthly vacancy inspections at no extra cost. Additional annual inspections cost $149 with our investor and gold pricing plans and are included with our platinum plan ($199/month).
Contract Termination Fees
Note that many companies will charge you an early termination fee if you break your contract with your property manager before it’s over. These fees can be very different, so include that in your contract.
At Evernest, we think you should be allowed to end your contract with your property manager any time you want if you’re not satisfied. We call it our 100% Happiness Guarantee.
Factors Affecting Property Management Fees in Detroit
Many of the above fees are included as ranges because multiple factors can affect the final cost of property management fees. These can include:
Type of property: Whether your rental property is a single family home, a multi-family apartment complex, or commercial property can affect the fees your property manager charges.
Size of property: Property size can also affect fees because larger properties require more maintenance than smaller ones.
Condition of property: A newer or renovated property can have fewer maintenance issues than an older property.
Neighborhood rating: If your rental property is located in a neighborhood that commands higher rents, your property manager may charge more than if your rental property is located in a neighborhood that commands lower rents.
Market competition: If there is less competition for property managers in your market, they may charge higher fees than if there is more competition.
Extent of services: Ultimately, the extent of services your property manager provides greatly affects the fees they charge. Handling rent collection is a much smaller investment for a property manager than offering 24/7 resident communication, maintenance management, and financial reports.
Hire Evernest As Your Detroit Property Manager
The Detroit market is an exciting place to be a real estate investor, and choosing the right property manager can help you to build your business and achieve your goals.
Have we convinced you to dive in? If you’re ready to work with a property manager, we’ve made it our mission at Evernest to provide hassle-free property management and deliver a steady return on investment to our property owners.
Plus, we can guarantee that we’ll place a well-qualified resident in your rental in Detroit in 21 days or less, or your first two months of management are free.
What are you waiting for? Reach out today, and let’s get started.
Source: This content was originally written for Evernest and published at Evernest.co
