Here in the Kansas City area a property manager can be a blessing or a curse. There are really good property managers. There are really bad property managers. Many different things go in to the whole make-up of what makes a good property manager or a bad property manager.
But what about cost? Like realtors, property managers can set their own rates though competition tends to keep the pricing structures pretty close together. I think you’ll find the average cost of a property manager in the Kansas City area to be about 8% of collected rents.
Now, there are property managers that will charge you 6% and some as high as 10%. But 8% definitely seems to be the trend. And then there are associated costs. Who keeps late fees or application fees? The real estate investor or the property manager? If there is any rehabbing is there an oversight fee by the property manager? And what about lease-out charges?
Generally when I’m guessing on expenses for a property I will figure 5% vacancy, then 8% management charges and 75% of one month’s rent for a lease-out charge. That may me a little high or low but I think it’s a great way to at least account for some if not all your property management charges when deciding whether a property is for you or not.