Every property management company in Chicago charges differing fees to manage an investment property. There are a number of factors to consider when working with a property management company to determine if their fees are too high:
How Much Does the Property Management Company Charge to Fill A Unit?
While it is important to understand how much it costs to get a unit filled; it is as important to understand where that cost is going. Many property management companies utilize realtor leasing agents to fill units and have to pay a commission to get a unit filled. This will motivate the agent to get the unit filled and shorten vacancy times. Some companies charge very small amounts to get a unit filled, but in the same light they do not have the same motivation to get the unit filled as others utilizing the commission route.
Does Your Property Manager Charge for Vacant Units?
Some property management companies in Chicago charge their management fees whether or not the unit is filled. At Letts Property Management, we feel this is not right as vacant units do not bring in any income and property managers should be doing their job and getting the unit filled as quickly as possible.
Can Your Property Manager Handle Evictions?
Evictions can be very costly, but not evicting a delinquent tenant can be even more costly. A good property management company should thoroughly screen every potential tenant, but it is still important to have an idea how much the property management company charges to handle an eviction. A portion of this cost likely goes towards an attorney, so it is important to understand all of the fees involved with a possible eviction.
What is the Companies Mark Up on Outsourced Services?
When working with outside vendors, it is common for a property management company in Chicago to charge a small mark up for their time. Be wary of companies claiming not to mark up these services as they are likely hiding something. Their time needs to be compensated for coordinating everything and therefore claiming not to charge a small mark up on outside vendors could mean offering lower quality or higher cost vendors that offer them a kick back for the work they bring. It is also important to understand how much will be outsourced. Some companies like Letts Property Management, are full service and have a full maintenance staff in house. This avoids using outsourced services except in rare instances and keeps cost for owners down.
Does Your Property Management Company Offer a Guarantee?
While this may not have much to deal with them charging you too much, having a guarantee in place shows a higher level of quality in their services. If the company stands behind its management services and fee structure, than offering a guarantee shows good faith that the company is offering services at a price they feel confident is best for owners and their own company.
In the end, do remember that you get what you pay for and any property manager offering to manage everything for fee is most likely not going to keep an eye on your property. Investment properties can cost hundreds of thousands to millions of dollars and giving control of your investment to strictly the cheapest option out may not be the best idea; but finding the right property management firm in Chicago for your needs is the key.
