Property Management Companies

If anyone has experience using property management companies to manage rental properties, could you please answer a few questions?

I'm mainly interested in knowing what percentage of the rent the company received and what services the company performed for you. I've come across services offering just basics (finding renters / vacation renters and giving them the key, inspecting property after they leave, and arranging cleaning services) to offering way more services (including paying all utilities and mortgage payments - obviously with our money-, having necessary repairs done - also with our money, etc. -- basically they take a LOT of control -- and a very large share).

BTW, this is not for a NY-based property, so both NY and OOS information would be helpful.

I'm just trying to get a feel for normal ranges and services offered, with an understanding that pricing may vary greatly depending on the area. Just looking for general trends.

Thanks!

Message edited 1/24/2008 1:36:34 PM.

Re: Property Management Companies

I have a property in AZ. A company got me a tenant and charged one month's rent.

They don't do anything as far as maintenance but once when I didn't receive the rent on time, they called and did some troubleshooting.

They handled everything for the lease and the security. They also did the background checks and credit.

It was worth it to me because I had to do nothing. They found me a tenant in 4 days when otherwise I could have been out the rent for a while.

I just wanted to add that they made sure the tenant changed the name on the utility bills. They arranged the cleaning people to come in and will inspect upon the tenant leaving. If the tenant defaults on the rent, they are responsible for the remaining lease.

Message edited 1/24/2008 12:50:37 PM.

Re: Property Management Companies

DH has a rental property in Myrtle Beach that he uses a service to rent out but, is eventually looking into running it himself.

I believe they charge approx. 20% of the money DH gets for the rental for fees/cleaning etc. The price they charge varies on the condition of the unit - if you have a nicer unit, they charge you less of a fee (I guess because they rent the nicer units first so they get more income in the end). They do not pay bills. If something major breaks, they will call DH and let him know, replace the item in question, and then bill him.

On top of mortgage, we pay insurance and association fees. Since it's in Myrtle Beach on the ocean, the insurance premiums are extremely high.

I am not 100% satisfied with the job they are doing but, we haven't had time to sit down and figure out how to do it on our own (we've lost a radio and vcr and they are supposed to inventory all of those items and they did a bad job in cleaning right before my parents came to visit - and the renters prior to them made frozen drinks and spilled them down the wall and all over the kitchen floor).

Prior to us getting married, DH got a good tax benefit from it - he was able to deduct all improvement expenses from his taxes but, now our combined income is too high for him to do that.

Re: Property Management Companies

Thanks, both of you! I really appreciate the information.

My OP may have been confusing. I didn't mean that the one company itself paid the mortgage -- I mean that the company in my OP would use OUR money to just physically make the payment for us... Clearly, we (or our corporation) are responsible for the mortgage.

ETA - Blu-ize -- (if you don't mind my asking!!) was your property manager's fee paid by the tenant or by you?

It doesn't apply to us right now, as we're looking mainly into vacation rentals, but will eventually trade up or expand to longer-term residential rentals in the future.

Message edited 1/24/2008 1:39:58 PM.

Re: Property Management Companies

We paid the fee. In NY, the tenant would pay it.

we are able to deduct all expenses from the rental. We may look into setting up an S corp for the income and expenses. right now, we're just telling the IRS it's a second residence.