Fees for property management in the Bay area are not set or standard. Each firm will charge a fee that they deem reasonable for their services. The best advice I can give you is to compare several firms and find out what they charge.
Fixed Fee or Percentage Fee Models
Most San Jose property management companies will charge fees one of two ways. Either it will be a fixed rate fee or a percentage of the rents they collect. There are advantages and disadvantages to each method. I think the obvious advantage for a fixed rate fee is you’ll always know what that fee will be. The percentage model will vary, depending on the rent that is collected. As your rents go up, your fees will go up. If rents go down, so will your fees.
The percentage of rent fee model is the preferable one for me. You’re incentivizing your property manager to collect the most rent possible. With a fixed rate fee, you can get a property management company that is getting fat and lazy. There is no incentive to collect a higher rent. They get the same fee if they are doing a good job or a bad job. So I advise you to make sure you align your property manager with your own interests.
Selecting Bay Area Property Management Companies
Overall, the main thing to stress is that you do your own due diligence. When you talk to a prospective property management company, request a copy of the management contract and review it. Make sure all fees are clearly stated. In some cases, there will be fees for leasing, costs to cover maintenance oversight, and other charges in addition to the monthly management fee. You want to be sure that everything is stated in the contract and you understand what services are included for each fee.
By comparing management fees and companies, you can uncover the best value for your property. Ask for testimonials and referrals so you have the confidence you’re selecting the right management company for your investment goals.
If you have any questions about this topic or general topics pertaining to property management in San Jose, please contact us at Pacific Gateway Properties.