You might probably be thinking that property management companies only make money from management fees. However, it may come as a surprise to many when they finally realize how management companies make. In fact, management fees are just but a fraction of what property management companies end up getting. If you are planning to start a property management agency, be sure to know how you are going to make money before doing anything else. Here are some of the most notable ways management companies like Eenhoorn make money.
Management Fees
It is with no denying that management fees are the most common form of income for any property management agency out there. Keep in mind some companies are only going to charge a flat fee whereas others opt for a percentage of the rent collected. Do not be surprised when you come across a management company that charges a management fee every month regardless of whether your property is fully occupied or not. The good news is that many states have a certain percentage that property management companies should impose as management fees on the rent amount.
Lease Fee
You might be wondering why you have to pay a sign-up fee or lease fees when hiring a property management company. Well, this is among the methods management companies use in making additional money. With sign up fees, you only pay upfront hoping the property manager can find you good tenants before the signed contract expires. Keep in mind the sign-up fee is meant to cover screening of potential tenants, drafting the lease or even marketing costs. This explains why people like Paul Heule have already built a fortune for themselves after starting a property management company.
Final Thoughts
These are just but some of the ways management companies make money. Other forms of making money include charging late fees, application fees, maintenance fees, service & notice fees to name a few. Do not expect to achieve success overnight since you will first have to build the reputation of your company. This is actually what Paulus Heule; the CEO of Eenhoorn did after deciding to venture into the industry. Paul Heule’s company now commands a huge share of the industry since they not only achieve client satisfaction but also sharpen the skills of all their employees. No wonder they are ranked among the best property management companies now.