While owning real estate is a great way to make passive income, being a landlord comes with some hidden costs. You need to purchase insurance, pay taxes, market your property, and cover the cost of maintenance and repairs.
Hiring a property management company in Kansas City, MO can add to the price, but these services are worth it. Property managers handle maintenance coordination, but is this a covered cost? Keep reading to find out.
Determining Property Management Fees
Calculating property management fees involves factoring in influences that impact the overall price. We'll go over some of these factors to help you understand how fees are determined and what they cover.
Services
The extent of services is the driving factor that determines property management costs. Full-service property management will be the most expensive option but allows you to be a completely hands-off landlord.
While this covers maintenance coordination, you can also opt for maintenance coordination alone if you don't require help with other property operations.
Tenant placement services and leasing-only services are additional one-off offerings from property management companies.
Property Size
The property management fees you incur will depend on the size of the property. A single-family rental home is much easier to manage than a 100-unit multi-family property.
In general, the larger the property size or amount of units, the higher the price of property management.
Property Condition
Expect to pay higher rental property maintenance costs if the overall condition of your property is bad. Fully renovated properties and newly constructed buildings won't require much, if any, maintenance.
Over time, the condition of the property will change. With a regular property maintenance schedule, a property manager will help you spot issues before they turn into costly problems.
Who Pays for Maintenance and Repairs?
The fees you pay a property management company will go into maintenance coordination and repairs you are responsible for. Property managers do not pay for repairs.
Hiring a property manager for maintenance coordination means taking the burden of maintenance off of your shoulders.
You will likely be asked to set aside a reserve fund that the property manager can take from to pay for repairs and hire contractors when an issue arises. Since maintenance emergencies can happen at any time, keep this reserve fund stocked.
Use your monthly rental property income to add funds to the reserve as it becomes depleted. As long as you keep this account funded, a property manager won't need to bother you with repairs and maintenance.
Property Management Maintenance Coordination
Your property management fees will cover maintenance coordination, but not repairs and maintenance tasks themselves. You will set aside a reserve fund that a property manager can use to pay for repairs.
SCUDO is a Kansas City property management company that helps landlords like you reach and exceed your investment goals. We offer maintenance coordination and full-service property management.
Conducting inspections and handling proactive maintenance issues are what we do best with our 24/7/365 maintenance center.
Our team will help you make solid, data-backed decisions about your property. Contact us today to learn more about our services.