Property Management Fees

Property Management Fees

Has anyone used a property managment company. I just purchased a 2br ranch and am concerned about finding renters myself this time of year due to the rural location of the property. (Ohio doesn't have the nicest weather) I contacted a local company and was told that for a fee of 1 months rent they will advertise my property in the paper as well as their internet site, find renters for me, do paperwork as well as background check etc., collect deposit and first months rent then turn it over to me to manage myself. Is this a good deal? I'm still learning since this is my first deal. Any info. will be greatly appreciated.

God Bless,
Donna

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Property management

Hi Donna,
The deal the local company is offering you is a standard fee for the services you listed. You should be able to find other companies that will offer these services and even more for a % of the monthly rent. In any case, you should check out these companies' references.

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OK Lakeside I took your advice and moved it for ya ;)

Hi Donna,

Yes, I have used a property management for all my properties. Will you be using them to manage your properties after you have the tenants in? My property management does the "marketing" (advertising, background, credit & criminal checks BUT I pay for the ads). They charge me a monthly fee (a percentage) and they take care of EVERYTHING! Renting it out, rent collections, notices & light maintainance. They are also the ones who are called when something goes wrong and needs to be fixed.

As for finding renters mine charges a 10% marketing fee of the total amount collected ie: deposit, 1st months rent & any pet fee. For example if my rent is to be $1000 and the deposit the same it would cost me $200 for them to market the property plus I pay for the ads in the paper (we also use Craigs list for free).

Back when I was first looking for a property management the 1st month for the "marketing" (advertising, background, credit & criminal reports) were to be done for one months rent like yours. I decided to go with a different company so we do it a bit differently. Your's is not unusual though so if you are happy with them, go for it! Don't be afraid to negotiate the contract before signing to make sure you are happy though:) Good luck!

Sincerely,
Angie

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Challenges are only challenges if you view them that way. Try looking at them as OPPORTUNITIES instead and success will follow!!! "ME" Eye-wink


HELOC

Hi Angie. I read your interview with Dean on successfest news letter and really like the way you are handling things. I would like to try and do the same thing. I am curious though.... why did you use your HELOC to purchase your first property in full and not just use your HELOC for a down payment?

I am new to investing and just trying to learn. I just went to my bank this week and got a HELOC. I am trying to follow your strategy and use the HELOC for a down payment on a property when I find one, do any rehab work if I need to, than rent out the property, get a re-fi, pay back my HELOC, and than hopefully the rental income will pay for the mortgage and than start over and do it all again on the next deal. Any advice? Thanks Angie!

Joe


Hi Joepa

Hello,

Thank you for the kind words & congrats on locking up your HELOC! If you want to do only a down payment that will work fine. If you have enough to do the whole thing than you have a little more edge than someone needing fiancing.

Now this isn't always the case of course but I look mostly at REO's. So when I make an offer it says "CASH"...banks like that. I have actually had an accepted offer that was much less than a competing offer. They went with mine due to quick closing and CASH.

You need to find your comfort zone so even if you have the full amount to pay but aren't comfortable then start smaller, work out the bugs, and build your confidnace. Trust me using Dean's statagies work! Enjoy the adventure that lies ahead of you!
Best,
Angie Eye-wink

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Challenges are only challenges if you view them that way. Try looking at them as OPPORTUNITIES instead and success will follow!!! "ME" Eye-wink


Thanks Angie!!

Hi Angie,

I appreciate the feedback. I can see what you mean by having an edge, you can lock up the property whole lot faster if you have cash. I want to start small and as I get more comfortable, work my way up.

I need to start working on my network or power team and get something rolling! Did you use Deans tips and strategies to build your network of people?

It sounds like your doing great! Keep up the good work.

Joe


lakeside,

The key with any contractor even with a Property Management Company is check references and get at least 3 quotes fro m2 different vednors if possible. You want to ensure rates charged are within reason but also the quality of service. The Management Company should provide excelelent service to you and your tenants and strive to keep your units filled and your best interest in mind. A local real estate investment club or some top real estate agents in the area should be able to provide some companies for your ocnsideration. I hope this helps. Believe and Achieve! Smiling - Joe

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Hi Joepa

Yes, I did you Dean's statagies. I asked the questions he recommended in the book BAREM. You may have some of your own you want to add that makes it more personal to you as well. For instance since I do my investing long distance "communication" is at the top of my list of things I need from someone who is going to be a part of my team. Good luck Smiling Angie

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Challenges are only challenges if you view them that way. Try looking at them as OPPORTUNITIES instead and success will follow!!! "ME" Eye-wink


Angie

I'm still going through the PFRERN book, but I will look for those questions in BAREM.

Thanks again!

Joe


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