With an increasing number of real estate investors, the demand for property management companies in Philadelphia is also rising. The value of a single-family home in Philly has increased by 15% over the last year. There is also an increase in awareness amongst the investors about the benefits of professional property management services. However, owners are often concerned about the rental management costs while looking for suitable services for their rental properties.
Every property management company in Philadelphia has a different policy and pricing structure. Some companies follow a percentage-based model, while others follow a flat fee model. In a percentage-based model, you pay a portion of your rental income to your property manager, whereas in a flat fee model, the owner pays a fixed amount, regardless of what his investment rental earns.
In both models, there are a few costs that owners have to pay while hiring a property management company.
Here, we delve deeper into Philadelphia’s rental management costs.
Leasing Charge
The leasing fee is the cost of finding tenants for your vacant rental. It is a one-time payment and is charged as a flat fee or a percentage of your first rental income. The leasing charges are generally equal to monthly rent or some part of it. It varies between 25% to 75%.
For example, if your first month’s rent is $250, you have to pay around $62 to $187 or a complete one-month rent.
The leasing charges include the following:
- Marketing and advertising of your rental, including online advertisements and photos.
- Responding to the questions and inquiries of tenants
- Scheduling the house visit
- Collecting tenant applications
- Conducting the tenant screening process
- Collecting pet fees, first-month rents, security deposits, and move-in funds
- Creating and signing a lease agreement
Home Inspection Costs
There are no fixed home inspection charges. They vary based on the type, size, and location of your rental property. A home inspection includes examining the home foundation, roof, plumbing, leakages, HVAC, structural components, and electrical systems.
The fees for a small single-family house may be around $350 to $400. For a house of over 2,000 square feet, it may cost around $400 to $500. The inspection costs for normal-sized 3 Bed-3 Bath single-family homes in Philadelphia are approximately $450.
Maintenance Charges
Maintenance charges are included in monthly management fees. This covers cleaning charges, taking out the garbage, and removal of leaves or snow. In addition, repair costs are added to maintenance in case a major repair took place in the given duration. Your rental manager can also provide a fixed maintenance service.
The maintenance costs depend on various factors such as type of damage, number of repairmen required, the severity of the damages, and the time required to fix it. You can set a cap on maintenance charges while signing the contract.
Tenant Placement Charges
A property management company takes the responsibility of finding your prospective tenants. Your property manager will conduct extensive tenant screening processes and background checks to find the right tenants for your Philadelphia rental.
After finding suitable renters, the company will also facilitate the moving-in process. Managers often charge tenants placement fees or bonuses, and some take 50% of the first month’s rent.
Eviction Fees
Sometimes, landlords may face problems handling their tenancy, especially when the tenants do not pay rent regularly or are causing a constant nuisance. In such circumstances, landlords have to tell their managers to evict the tenants.
The process of eviction is lengthy and complex. Managers often charge based on the difficulty to undertake the eviction process and the required crew for the eviction. In Philadelphia, the eviction charges vary anywhere from $200 to $500.
Different Costs for Vacant and Occupied Properties
Management costs also depend on whether the place is vacant or occupied. Some companies charge one month’s rent in advance for vacant units. It includes agent commission, advertising costs, frequent showings of the property, and documentation of lease agreement. For occupied units, companies charge more than vacant units, as their services also include yard cleaning, maintenance, and repairing charges.
There is no set cost for management of your investment rental as it depends on numerous factors such as condition, size, type, and rental location. In addition, the kind of service you are availing of also affects the cost.
For example, if you hire a property management company only to collect monthly rents, you will pay less than you would for a company hired for managing all services for your rental unit.
Although hiring a property management company seems costly in the short-term, it provides you with all services and support required to increase and maintain the value of your rental and is very cost-effective in the long run.
TCS Management is an experienced and trusted property management services provider in Philadelphia, with over a decade of experience in the local real estate market. For more details about how to manage your property management costs, connect with us at TCS Management.
