Anyone who owns a rental property in Wellington can benefit from partnering with a property management firm. It’s the best way to ensure your rental business runs smoothly and secure a consistent flow of rental income. But as with most good things, property management comes at a price. In this article, we tackle how much property management costs in Wellington, FL by breaking down the common management fees.
How Much Does Wellington Property Management Cost?
As you “window shop” for a property manager, you’ll that the cost will vary as it will likely be based on the contents of the property management package. Below, you’ll find the breakdown of property management fees:
#1 Base Fee
Wellington property management companies charge a base fee that’s based on the rent collected or an agreed-upon flat fee.
Percentage of Rent
Most property management companies charge a base fee that’s about 8 to 10 percent of the rental income. That means if your property generates $3,000 a month, you’d have to give your property manager $240 to $360 per property per month. This, however, does not cover other costs you might be charged, which we’ll go into more detail below.
Note that some property management companies will still charge a fee even if the property is vacant or if tenants aren’t paying their rent. This fee will be based on the anticipated rent. Be sure to ask your property manager if they will calculate the base fee according to the collected rent or the rent due.
Some property management companies in Wellington require a flat fee that’s calculated according to the property’s square footage. For instance, the flat fee for a single-family home might be $150 a month, while the fee for a mansion might be significantly greater.
#2 Set-up Fee
It’s not uncommon for a Wellington property management company to charge you a minimal, one-time fee for signing a contract with them. Companies charge a set-up fee to create your account, inspect your property for the first time, open a bank account for bookkeeping purposes, and so on. The set-up fee varies, but on average, you’ll have to pay about $250 to $500 per property.
#3 Maintenance Fee
Property management companies have their own network of vetted vendors who can provide them with discounts. With that said, one of the advantages of working with a Wellington property manager is that it saves you a significant amount of money. Maintenance costs will be a lot lower than they would be if you were to find them on your own.
As a golden rule, aim for a maintenance budget of about 1 to 1.5 times the monthly rent. That way, you’ll have a maintenance fund on standby in the event that your tenant submits a repair ticket. Don’t worry, your property manager won’t carry out repairs without your go signal. If the price seems too steep, you can ask them to look for a more cost-effective option.
Be careful! Some property management companies will mark up the maintenance costs by about 20 percent. You should only be paying for repairs, replacements, and the costs of labor. If they raise the rate, stay away from that company – a good property manager would never try to take advantage of you.
#4 Lease Renewal Fee
Not many landlords are aware of this, but renewing a lease can be incredibly time-consuming. For one, the property manager needs to change the lease agreement if the rent increases or decreases. They also have to visit the tenant to get their signature. What’s more, they have to consider any incentives that you’ve granted them to encourage renewal.
The price depends on the property management company, but you’ll probably pay about $200.
#5 Tenant Placement Fee
Your Wellington property manager might charge you a fee for placing a new tenant. This is usually a flat fee or a percentage of the first month’s rent. It covers the cost of advertising the property, screening tenants, preparing the property for move-in, and so on.
#6 Eviction Fees
Evictions are inevitable – there will always be one or two tenants who’ll violate the terms of their lease or stop paying rent. When this happens, your property manager will have the tedious task of evicting that tenant. To be compensated for how challenging it can be, they’ll charge you an eviction fee of about $200 to $500 per tenant, plus legal fees. Note that some property management companies don’t have an in-house legal team, so they might have to partner with a law firm. To reduce costs, find a Wellington property management company with its own team of real estate lawyers.
#7 Termination Fee
Your Wellington property manager wants you to be in it for the long run. If you decide to end your partnership with them earlier than what’s written in the contract, they will charge you a fee. The cost varies, but most property managers will charge one month’s worth of rent to compensate for lost income. However, if you break the contract because of valid reasons (e.g. the property manager hasn’t been doing their duties), you won’t have to pay a fee.
Account for Local Costs
The cost for property management companies will vary as it will depend not only on the company, but also on the local costs. Remember, costs for vendors, legal advice, etc. vary by region. For instance, plumbing costs around $261 to $375 in Wellington, but you’d have to pay anywhere between $324 to $466 in big cities such as Malibu.
Costs will also depend on who your property management company has partnered with. If they’ve partnered with expensive vendors, expect to pay more even with discounts.
How Much Does Property Management Cost in Wellington?
There’s no way to tell with certainty how much you’ll have to pay for Wellington property management, as the cost depends on various factors such as the property type, local vendor costs, and so on. Property management companies can also set their own rates. With that said, the best way to find out how much you’ll have to pay is by scheduling a one-on-one consultation with your property management company.
If you’re looking for a property manager in Wellington, FL, request a commitment-free quote from Luxury Property Care. We provide full-service property management services to greater South Florida. Having been in the Wellington real estate industry for years, we’ve established a vast network of vendors who can offer their services at budget-friendly rates. And since we’ve found the “sweet spot” when it comes to pricing, we can guarantee you cost-effective property management that doesn’t compromise.