For people new to real estate investing, figuring out how Denver property management works may not seem too simple. You know that you don’t want to deal with the headaches of finding and managing tenants, but you also don’t want to pay too much of your rental’s income for something you could do yourself.
The most common questions from rental owners often seem to revolve around the costs of property managers. There are a number of choices for property management in Denver, each with their own rates and charges. That being said, here are some of the most common fees that you can expect to pay:
Tenant Placement – Tenant placement fees can vary with the market, but are almost always a percentage of the rent. It’s not uncommon for a placement fee to be a significant portion of the first month’s rent, although many managers will be willing to pay it back if the tenants are evicted or move out early.
Monthly Management – This charge comes out of the monthly rent payment and covers all of the day-to-day tasks of Denver property management. It’s standard to find 8-10% being charged, and 15% isn’t unheard of depending on the services offered.
Lease Renewal – Also commonly referred to as a “lease-up” fee, many Denver property management companies charge an additional fee when tenants renew their lease. This is sometimes a fixed amount, and other times a percentage of monthly rent.
Meeting Vendors / City Officials – When the property managers have to meet with vendors (for conducting repairs) or city officials (if local rental permits are needed), most will charge an hourly-rate for their time.