How Much Do Phoenix Rental Management Companies Cost?

Oct 18, 2016 | Experts Column

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The cost of professional property management in Phoenix is varied and depends on your property and the company you’re using. However, when you’re measuring the cost of management services, you must also balance that against the gain.

How Property Management Can Pay for Itself

A number of years ago, a marketing company called All Property Management did a survey and found that the national vacancy rate for rental properties averaged 9 percent. When they surveyed about 300 property management companies, they found the vacancy rate in that population was an average of 4.5 percent. Check out our articles on the Resources page of our website, particularly The Costs of Vacancy and Greed Versus Reason. We talk about vacancy costs as well as this survey in more detail. It can really put the cost of property management into perspective.

The bottom line that All Property Management discovered is that over a period of five years, property management companies not only pay for themselves, they earn their owners an extra $2,000, on average. A quality property management company will pay for itself just through reduced vacancies. There are a number of other benefits.

Outstanding Service Versus Discounts

Someone once called and wanted to know our rates and if they could get a discount. The property manager on the phone said we give great service, not discounts. The caller argued that all property management companies do the same thing, but that’s not exactly true. We have talked to landlords with other property management companies who have spent a lot of time and money on evictions and property repairs because their managers place bad tenant after bad tenant in the home. That’s why service is more important than discounts. If a property management company puts good tenants in your property and provides outstanding service, you’ll save money. Rates vary, but so does service.

Tenant Placement and Monthly Management

There are two things that happen when it comes to management costs. There’s a tenant placement fee, which is sometimes called a lease up fee. Then, there’s also a monthly management fee that covers the ongoing collection of rent, communication with tenants and property owners, maintenance, legal issues, and other management duties. Some companies charge a larger lease up fee that’s the equivalent of one month’s rent or even higher, and then their monthly management fee is lower. At McMath Realty, we charge a minimal leasing fee and a nominal and fair monthly management fee. In return, you get great, high quality service. We have a 98 percent excellent tenant rate.

You don’t want to be too focused on saving a penny in management fees because you can cost yourself big dollars on vacancy and damaged property from poor tenants. Don’t think about cost of a management fee, think about the cost of a bad tenant. If you have any questions about this, please contact us McMath Realty Property Management.

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