Property management is similar to management in any other business. A property manager provides management and helps those who are investing in real estate. Real estate involves the land and building which could include tenant’s, maintenance, and evictions.  Once you start managing many properties, or if you invest in a property that is far from where you live, property managers become as essential as rental property insurance.

If you have a property, someone else is using it, paying rent for it and you do not live close to it, then you might want to hire a property management company. It serves as a bridge between yourself and renter/rent payer. The services, property management company, provide include; whether the renters are put through proper application process, are they paying their rent etc.

You have to pay the property manager fees for the services this company would provide you. The property management fees vary from company to company but there are some of the fees that you can expect while dealing with any company. Percentage based fees are most common. Percentage fee means the project management company asks for percentage of the rent that you charge the renters, standard is 10% but some will charge higher than 10% and some will charge lower than this.

Many companies ask for leasing commission. Leasing commission is charged just once and is equal to the half of the first month’s rent. This is not standard and it varies from company to company. Advertisement fee is the actual fee because it is charged when companies really spends money for the advertisement of your rental property. Some companies try to make their own profit on this charge, these companies are not trustworthy.

Material fee is charged only in case if there is something that needs to be fixed on your property. The property management company will ask you whether to fix it or not. If you permit the company then you will have to pay for it. Again make sure that company is not intending to make their own profit.

Few companies charge vacancy rent which is not required by the company. Companies expect their regular fees even if there is no renter and no rent is being received. Make sure that in the contract it is stated that management payment will be paid out of “collected rent” or “rent collected”.

Before signing the contract read it again and again, ask as many questions as you can before you are going to sign. You can take help from any legal advisor for discussing the terms and conditions stated in the contract that suit both the parties.  Getting a property management company might be one of the best investments you’ll ever make, but always be wary until you have worked with them for a while, and know you can trust them.