Property management companies typically charge between 8% and 12% of the monthly rent to manage the rental property. This fee covers their costs for marketing the property, running background screening on potential tenants, collecting rent, and handling routine maintenance issues and repairs.

Since management fees are a percentage of the rent, the fees will be higher in urban areas with a higher cost of living. Managers also have higher fees for multi-family properties bringing in more monthly rent payments to process. Finally, the more services that the management company offers, the higher their fees. If the company is required to handle maintenance and repairs for your rental properties, you will pay more for their services than if you only require them to screen tenants and collect monthly rent.

Property management companies are responsible for the day-to-day operations of rental properties. They handle everything from finding tenants and collecting rent to dealing with repairs and maintenance.

Depending on your budget and the number of properties you own, your property management company may perform the following tasks:

• Screen tenants by running background checks to ensure the potential renters have stable employment and a good rental history.
• Review and sign the rental agreement lease with any approved tenants.
• Collect rent from tenants every month and deposit the rent payments into the owner's account.
• Schedule routine maintenance services like lawn care and pest control, as well as schedule contractors to fix any repair issues.
• Advertise any vacant properties online, in print, and by holding open houses.
• Provide customer service to both the property owner and the tenants by answering questions about and resolving any disputes.

You should consider hiring a property management company if you have room in your budget for the monthly fees, especially if you own multiple properties or you live far from the properties you rent. An experienced property manager can take over the daily operations for you, saving you time and the cost of maintaining the properties.

In addition to collecting rent and handling maintenance issues, a big benefit of hiring a property manager is that they market your vacancies, screen tenants, and quickly fill any empty units so that you don't suffer the lost income when a tenant moves out.

Yes, an experienced property manager is worth the monthly fee, especially for new landlords that are still learning the ropes. Knowing your property is in good hands can give you peace of mind and free up your time to focus on other interests.

Additionally, a licensed property manager reduces your legal liability by understanding discrimination, disability, and tenant laws that govern leasing practices including evictions and late rent. If your rentals are part of a government-funded affordable housing program, the property manager will ensure you adhere to the complicated set of rules that pertain to your property.

Property management licensing requirements vary by state. In most states, a property manager that is renting or leasing properties is required to have a real estate broker's license or be a real estate salesperson working for a licensed broker. There are some exceptions to this rule including onsite managers who work at one property, community association managers, and short-term rental managers.

The main reason most states require licensure for property managers is to prevent legal liability for property owners. Licensed property managers undergo a background check and are trained in the laws against tenant discrimination, property accessibility for individuals with disabilities, and confidentiality laws. The only states that do not require property managers to be licensed are Vermont, Idaho, and Maryland.

No, property managers do not typically pay for repairs out of their pocket. Instead, their monthly fees include a reserve fund for repairs and maintenance. If a repair is needed that exceeds the amount in the fund, the property owner is billed for the additional costs.

An experienced property management company should provide its clients with a management agreement that spells out their responsibilities. Since larger multi-family properties require more maintenance, the management company charges a higher monthly fee to increase the size of the repair fund. Properties managers also charge higher fees in certain locations that are more prone to damage from weather or crime.

Handing over the responsibilities of your rental property to the management company is an important decision. Be sure to ask these questions to help you choose the best manager for your property:

• What are your monthly rates?
• What services are included in the monthly rate?
• How long have you been managing rental properties?
• What is your marketing plan to fill vacancies quickly?
• What is your screening process for tenants?
• How often do you visit or inspect the property?
• How do you handle repairs and maintenance?
• How do you handle tenant disputes or late rent payments?
• Have you ever dealt with an eviction?

Choosing a property management company you can trust will give you peace of mind. Here are some tips to help you choose the right property management company:

• Do your research online by reading about the company's experience and the services they offer.
• Read online reviews by current and past clients on HomeGuide and Google.
• Make sure the company is licensed and insured as required in your state.
• Interview several companies to find a company that fits your budget and needs.
• Ask about the company's marketing plan to fill vacancies with good tenants.
• Select a company that is prompt to respond to any questions or concerns.