If you own an investment property in the Denver area and have found yourself looking for a way to outsource all of the extra work that comes with managing your property; you might find yourself asking, “how much do property managers in Denver cost?”
Let’s break down the typical fees that most property management companies charge, so that you can be better educated when you’re talking to potential property managers.
When we talk about fees, there’s a few terms you should know of: leasing fee, management fee, renewal fees, repair and maintenance fees, and optional services. All of these fees will fill different needs for your investment so let’s dive into what they mean and how much they might cost.
Leasing Fee
The leasing fee is what a property management company charges when the property lists and subsequently leases. Once the resident signs the lease, the property management company would then earn that fee.
Fees can range from a flat fee, charging the same amount regardless of monthly rent price, or can work in terms of percentage, such as 50% to 100% of first month’s rent. Leasing is typically what investors need the most assistance with, so this is likely going to be the first fee associated with any property management services.
Typically, the leasing fee will cover listing the property, collecting applications, and vetting applicants. When the tenant successfully moves in, the property manager then reimburses themselves by charging the leasing fee.
At Evernest, we charge the equivalent of one month's rent for our leasing fee . It covers the general services associated with the fee, as well as a home walk through/inspection, access to our marketing suite, and a rent-ready checklist.
If you choose a more comprehensive pricing plan , though, you could pay as little as 50% of one month’s rent for your leasing fee.
Finding the right resident for your property in a sea of online applications can be daunting, so trust us when we say property managers are worth every penny when it comes to ensuring leasing runs as smoothly as possible.
Management Fee
The management fee is the amount you pay your property manager in exchange for their care of and work on your property.
Similar to a leasing fee, your management fee could be a flat fee or one based on a percentage.
Keep in mind that, if you choose a percentage-based plan, the more rent a PM collects on your behalf, the more money you will pay out to them.
We personally believe that managing a $1,500 house, a $2,000 house, or a $2,500 house is very similar. So if you don’t want to be punished for having higher rent, you might want to consider a flat fee plan.
Renewal Fee
Imagine your property manager successfully found a tenant, leased your property, and collected rent for a year. Now your happy tenant’s lease is up, and they’re looking to renew. This is where the renewal fee comes in.
When the resident renews the lease, typically annually, you’ll be charged a fee in exchange for the property management company handling this. This is called the renewal fee, and it covers initiating the paperwork and communication necessary to complete the lease renewal (so that you can keep your property rented for another year).
As you’re probably beginning to recognize a pattern here, some companies charge a percentage (we’ve seen rates up to 25%!) and some companies charge flat fees. When you choose to use Evernest as your property management company, we’ll charge you a flat fee for renewal, since lease renewal takes the same amount of resources regardless of rent price.
Repair and Maintenance Fee
Repair and maintenance fees are the costs associated with coordinating any work that needs to be done at your property.
Imagine a resident calling to let you know about an issue or a repair that needs to take place. In these instances, a vendor needs to be quickly dispatched to the property.
Well, working with said vendor requires a ton of coordination between the professionals and your tenant. That means there’s going to be a lot of extra work for someone to handle. And since emergency maintenance doesn’t happen on a schedule, it can be overwhelming to play middleman in order to get the problem solved.
Repairs and maintenance like this is not typically covered by the normal management fee and it’s common for management companies to charge a percentage on top of the invoice.
For instance, if the vendor charges you a hundred dollars for a service, then they’ll essentially add ten dollars on top of that to charge for the coordination of that maintenance.
We know how critical smooth and efficient maintenance is, which is why Evernest has our own internal maintenance department. This means that, when you choose our Evernest Select package, maintenance is included and there’s no need for upcharge. And with our Platinum package, on the off chance we do need to outsource to a third party for repairs like roofing or HVAC, we also won’t charge you for the coordination
With other companies that need to hire third-party workers for regular, day-to-day maintenance, you’ll be paying that fee every time.
Optional Services
Optional Services are the many issues that happen outside of typical property management obligations, and the fees associated with having these services provided.
Optional services might be something as simple as having the property’s gutters cleaned. Whether you ask your management company for this service or they remind you it might be time to perform it, you’ll be charged an additional fee.
Another optional service is what we call eviction protection. This is when a property management company charges you a fee and, in exchange, will handle the entirety of any evictions that need to take place at your property.
Our final example of an optional service is a quarterly inspection or review of the property. This is where we go through and create a report with photos and comments from our team, so that you can stay up-to-date with the status of the home without needing to physically be there.
Final Thoughts
To recap: we covered the leasing fee, the management fee, the renewal fee, repairs and maintenance fees, and then the optional services. You can think of these as tiers that most companies will offer as packages increase, and there’s plenty of room to shop around for what best fits your needs.
With so many terms to know and services available, there’s just a lot to take in when it comes to property management. We hope this helps you get a better understanding of all that you’re gaining when you choose to sign up for a property management service, as well as what to expect for pricing.
If you have any additional questions about our property management services, or are ready to outsource your stress, please reach out to our Denver team. We’d love to connect with you!
Source: This content was originally written and published for Evernest at Evernest.co
