Property Management Fees That Drain Your Rental Income

It’s usually not one big fee that gets property owners. It’s the pile of small ones. Furnace filter charges, vacant unit fees, inspection fees, move-in and move-out fees, all buried in the fine print and repeated month after month until they take a real hit on your income statement.

I just had this exact conversation with a property owner who was leaving another local management company and hiring me. He didn’t even remember agreeing to half the charges on his statements. That’s what prompted this.

1. Don’t just assume. If you’re a property owner, don’t assume you know what fees you’re being charged. There are fees for just about anything of value in life today, and the problem comes when you agree to them without fully understanding what you are signing. Many owners don’t remember consenting to half the charges on their statements because they’re buried in the fine print.

So when you hire a property manager, find out exactly what the fees are, how they work, and when they accrue. Don’t assume. Don’t hope. Ask.

2. There’s really no limit to what some property managers can invent. A furnace filter changing fee? Sure, $75 doesn’t sound bad. But make that a quarterly fee, and you’re at $300 a year just for furnace filters. Vacant unit management fees. Inspection fees. Move-in fees. Move-out fees. Reinspection fees. There is no cap on what some companies will tack on. Fees for anything can be invented, but your management contract should protect you from charges you didn’t agree to. Make sure it does before you sign.

3. Follow the money. A property manager who is charging you for everything is going to act and talk a certain way, and you’ll start to notice it. Here’s something I think matters: property managers who don’t own their own rental properties won’t really understand how petty and unfair some of these fees can feel when they hit your balance sheet.

I manage my own properties through my own company, so I feel it the same way you do. I don’t like these fees, and I know my owners don’t either. We try hard to keep our fee structure simple and straightforward because that’s how I’d want to be treated.

The real estate market is constantly changing, and we do things today in property management that were impossible for investors 20 or 30 years ago.

My team at RE/MAX Masters and Masters Property Management is always evolving, too, and we’re ready to help you and your family get the right help for your real estate needs. Our team motto is simple: a tradition of trust in Northwest Ohio real estate.

If you have questions about your current property management setup, or if you’re looking for a manager who keeps things simple and honest, give me a call at (419) 874-1188 ** ** or email me at jon@modene.com. You can also visit nworentals.com or besthomesintoledo.com to learn more about what we do and see what’s available.