When you’re looking for a property management company in St. Louis, it’s natural to want to compare prices. But, many owners make the mistake of comparing prices without comparing services. Before you sign a management contract with a property manager, make sure you understand what you’re getting for your management fee and how the cost is structured.
St. Louis Property Management Pricing Models
Most property management companies will charge you in one of two ways. They will either use a flat rate or a percentage of the rent that’s collected. With a flat rate, you pay a set amount every month. With a percentage model, you’ll pay a portion of the rent that your property manager collects.
Why Flat Rate Pricing Works Better
Flat rate pricing is usually more cost-effective than percentage models, especially if you have a high end property. When you have a rental property that earns a higher rental amount, you’re better off paying a flat rate. With percentage based pricing models, the more your rental price climbs, the more you pay your property manager.
The flat rate model is also more equitable. You don’t have to worry about your property being ignored for properties that are earning the management company more money. Owners with $800 homes pay just as much as owners with $2,000 homes, so there’s no hierarchy when it comes to dividing a property manager’s time and attention.
The flat rate pricing model is fair to all parties.
Understanding Leasing and Management Fees
Most property management companies will charge a monthly management fee and a one-time leasing fee. The management fee covers all of the services provided on a daily basis including rent collection, inspections, maintenance coordination, accounting services, lease enforcement, and tenant relations.
The leasing fee covers the cost to find and place a tenant. Usually, this includes marketing, showings, application processing, and tenant screening. Your property manager will negotiate and sign the lease with the tenant, coordinate the move-in details, and collect the security deposit and other move-in funds. The leasing fee will also be charged as a flat rate or a percentage of the first month’s rent.
Measuring Services and Costs
Every company structures its costs and services differently. It’s essential that you work with a property manager who is transparent and willing to be open about what you’ll pay. Read the management agreement carefully and ask any questions you have about payments and costs.
If you have any questions about how to pay for property management in St. Louis, please don’t hesitate to contact us at AMOSO Properties. We’d be happy to tell you more about our cost structure and how we save property owners money.