The general cost of a property manager in San Diego starts with the monthly management fee. Typically, a percentage of the rent. So, you will likely see a number anywhere from 6-10% for an unfurnished house or condo.
When it comes to multifamily properties the monthly management fee is usually lower per unit. Likely 4-6%. This would also vary if there is an onsite manager. With 16 units or more, law requires an onsite manager. This would not usually affect the management fee monthly, but the additional fees like leasing, renewal etc.
Furnished House or Condo
These types of properties require more attention and detail. A property manager must deal with several turnovers throughout the year, often weekly or monthly. Arranging for cleaning, repairs etc. Also, a property manager must inventory all items in the home. Counting forks and spoons. Making sure nothing was broken. The cost of a property manager for a furnished unit is usually 15-20% per month.
Most property management contracts have ancillary fees to offset the costs of doing business. With the average rental near $2500 a property manager is at most making $250 a month. That doesn’t come close to covering anything other than just collecting rent, technology, and employees.
Some other fees you will see include:
- Leasing Fees- When a new resident moves in. This includes the marketing, showings, application process and move in assessment. The application process alone can take hours of time, calling on references. This summer, we had 10-15 sets of applications for each property. Updating each one on their place in line and answering questions can easily eat up that leasing fee. Most will be anywhere from $200-equal to first months rent.
- Renewal Fee- Typically this includes a visit to the property a market rent analysis. Discussion with the owner and residents. Work orders for routine maintenance like smoke detectors or preventative plumbing repairs. Most importantly it includes signing a current lease. Every year the lease terms change and it is important to keep up to date.
- Maintenance Fees– These are always associated with work done at the home. You are only paying when things actually happen. No maintenance, no fee. Most maintenance commiserate with the work done. Anywhere from $10-$1000 for large projects.
- Year End Fees– Each year we have to process tax documents for owners and vendors. This takes time and usually additional resources. Special forms etc. The year end fee will usually be around $100-500.
- Close Out Fees– When you start or end a relationship with a property manager there is a ton of work that goes into building your profile in the system. Setting up payments and processing notices. The close out process can take about 90 days to insure everything is done correctly. It’s not a gym membership where you just cancel and stop going. There are year end reporting and final accounting that always take time and resources. Expect about $500 here.
In general, when hiring a property manager, you are making an investment in your rental property business. You are investing in what your time is worth. Do you really want to try to wing managing a rental property? Or do you want it handled professionally? It comes at a cost. The real question is not what the cost of a property manager is. The question you should really ask yourself is what is the real cost of NOT hiring a property manager?