How Much Does It Cost to Hire a Real Estate Manager
Real estate management can be a complex and time-consuming task, especially for those who own multiple properties. That’s where hiring a real estate manager can be a wise decision. A real estate manager is responsible for handling the day-to-day operations of a property, such as finding and screening tenants, collecting rent, and maintaining the property. But how much does it cost to hire a real estate manager? Let’s take a closer look.
Flat Fee vs. Percentage Fee
When it comes to hiring a real estate manager, the cost can vary depending on the type of fee structure they offer. Some real estate managers charge a flat fee, while others charge a percentage of the property’s rental income.
A flat fee is a set amount that the property owner pays the real estate manager each month. This fee is typically agreed upon in advance and does not fluctuate based on how much rental income the property generates. On the other hand, a percentage fee is calculated as a percentage of the property’s rental income. This means that the real estate manager’s fee will increase or decrease based on how much money the property brings in.
Factors Affecting Cost
Several factors can affect the cost of hiring a real estate manager. These include the number of properties the manager will be overseeing, the type of properties (residential, commercial, etc.), and the level of services provided. Some real estate managers may offer additional services, such as property maintenance and financial reporting, which can also impact the cost.
According to data from industry sources, the average cost of hiring a real estate manager typically ranges from 8% to 12% of the property’s monthly rental income. For example, if a property generates $2,000 per month in rental income, the real estate manager’s fee would be between $160 and $240 per month.
Flat fees can vary widely depending on the market and the specific services offered. In some cases, a real estate manager may charge a flat fee of $100 to $300 per property per month. This flat fee may cover basic services such as rent collection and tenant screening. Additional services, such as property maintenance and financial reporting, may incur an extra cost.
In addition to the base management fee, property owners should also consider any additional costs that may be associated with hiring a real estate manager. For example, some real estate managers may charge a leasing fee for finding and placing new tenants. This fee is usually equivalent to one month’s rent and is typically only charged when a new tenant is secured. Property owners should also inquire about any other potential costs, such as maintenance and repair fees, before entering into a contract with a real estate manager.
Hiring a real estate manager can be a valuable investment for property owners who want to streamline the management of their properties. The cost of hiring a real estate manager can vary depending on several factors, including the fee structure, the number of properties, and the level of services provided. It’s important for property owners to carefully consider these factors and to thoroughly review the terms of any potential contracts before making a decision. By doing so, property owners can ensure that they are getting the best value for their money when hiring a real estate manager.