Caveats of Using a Property Manager

A property manager is commonly paid for tenant placement, ongoing management, or both. Tenant placement can be quite a onetime fee that differs from 1/3 with a full month's rent. Ongoing management is paid each month which is normally 5-10% with the rent collected. However, sometimes you can find hidden fees and other junk fees the manager may charge.
Making profits from repairs
Property management companies might have their particular in-house repair and maintenance division or perhaps a sister company. Their main business may well not come from managing properties, but from making repairs. They can charge outrageous high hourly rates on repair and maintenance. They can also mark up the materials without providing you with other choices to pick from.
Often times they will often not let you use another contractor. Even worse, they find unnecessary circumstances to repair or replace to create a huge profit at your expense. Be  read  to negotiate these services and make sure these are around the property management agreement. If not, pass this provider up and appear elsewhere.
Extra charges during property vacancy
There are property managers that won't get paid unless the house is rented. It gives them incentive to have your house rented as soon as possible. Some companies charge a fee even though the home is vacant. Some charge the same rate as when the house is rented, while some charge reduced rates.
On top of that, they charge a fee a fee to find a tenant. Even if the property manager claims free during vacancy, there may always be a catch. A new tenant of a friend of mine moved in on October 1st along with the house was vacant in September. However, his property manager still charged him full commission for September. The reason he gave was because the lease was signed in September.
Late fee policy
Some property managers collect your entire late fee or perhaps the fee for non-sufficient funds. They argue collecting late payments requires extra work. It is true to some degree; but it will not be the better choice to enable them to profit from it. This is true particularly if those fees are set in a pretty large quantities inside the lease agreement.
You might wonder in the event the manager is attempting to make a straightforward benefit from collecting such fees. In addition, they're the ones who recruited the tenant within the first place! Splitting the fees between owner and property manager, or capping exactly what the manager are able to keep to some specific amount in a given year, seems more affordable and fair.