If a person has a unit for rent and also needs property management, then he/she has probably thought of negotiating the property management fees. Everyone can negotiate the prices of property management. You have to start from the position of power.
If you have any one or more of the following, then you have the better option of getting lower fees of the property management:-
- Multiple properties
- High rent property
- Multifamily unit
- Multiple properties – you have multiple properties; then you can make more money by collecting the rent on the farms. Tell your manager if you have a handful of units that the rate is so high. They can reduce their fee from 10% to 8% or 5%.
- High rent property – your property is placed in a desirable area; then, you can rent it for a large amount of sum. The rent collected from this property will be higher than the rent collected from nearby cities.
- Multifamily unit – the unit can put you in a strong position. This way, you can receive the two or more rent cheques per month. This way, the manager’s fee will increase. If anyone has 4 unit properties, then they will try to reduce 2-3 %.
Negotiating other fees
You will be charged for the other various items rather than the property management fee by the company throughout the term. Some of the prices are given here in which you can try to reduce up to some extent. They are as follows-
- Setup fees
- Maintenance fees
- Lease renewal fees
Setup fees – property manager, it is like a blessing to take on a new property. By taking upon the new feature, their income also increases as well as they expect to get at the end of the month, a more substantial amount cheque. If the tenant pays the rent on time, then make a clear argument that there is no set up because the manager of the property does not have to do extra work.
Maintenance fees – estate investors may get confused about the maintenance fees. Many firms have in house maintenance to provide service to the property. They can charge 10 to 15 % on the work they have outsourced. Try to research to find a manager who doesn’t markup the maintenance fees. There are fewer chances of a reduction in costs. You can do it by yourself by-
- Performing the repairs yourself,
- Hire your maintenance, etc.
Lease renewal fee – renewal fee is included by the management company when the tenants sign their lease for another term. There might be a full month’s rent when you have one property. But if you have multiple properties, then this will be going to be a big hit. Always try to negotiate the lease renewal charges.