Today we are sharing some advice for when you’re shopping for a management company. You need to be careful of the really low price that might grab your attention. Property managers who advertise prices that are much lower than others on the market are always going to include some hidden cost.
When the price is low going in, you will almost certainly have a heavy cancellation fee, because the management company knows you aren’t going to be happy with them for very long. When there is low lead pricing, you have a lack of service. Management companies cannot afford to provide full service with those low prices. They make it up on the back end. You’ll be charged additional costs for maintenance invoicing, and the company will even mark up sales taxes. We have seen cases where someone who is required to pay a 1.5 percent sales tax is actually charged 3 percent by a management company.
Other hidden fees you’ll find include move in administration fees, which are not usually disclosed to the owner, and late charges to the tenant that are retained by the management company and not shared with the owner. We have also seen administration fees charged to both the tenant and the owner to handle HOA notices and issues. There might be an administration fee for posting a 5 Day Notice – and it might be called a legal fee. Some companies will charge additional money for copying keys, making photocopies or sending you mail. Beware of a company that charges you the full amount of a court action even after the tenant ends up paying rent. You need to know what exactly a company is charging for before you hire them.
These are the most common hidden fees that you want to avoid. Make sure you have a well written management agreement with a full disclosure of all the fees. If you need any help, please contact us at Paramount Property Management & Realty.