Hey, everybody. Matthew Whitaker here, with another question Denver owners ask. Today’s question is, “How much do property management companies in Denver cost?”
So, I want to break down the fees traditionally property management companies cost and so that you can be better educated when you’re talking to potential property managers.
Okay, so I want to break those down. So I’m going to run down them real quick.
There’s the leasing fee, management fee, renewal fees, repairs and maintenance fees, and then optional services, services that you’re gonna pay for in addition to normal management fee. So let’s talk about it.
First one is leasing fee.
So this is a fee that a property management company charges when the house lists and leases.
Once the tenant signs the lease, the property management company would then earn that fee.
I’ve seen fees range from like a flat fee, like a flat dollar fee, all the way up to a percentage, like 50%, 100% of first month’s rent.
A lot of this is very market-specific. So, we’re talking specifically about Denver and of course, Denver’s broken up into many sub-markets.
So, getting the right tenant is so important. A leasing fee is the first thing that a property management company will charge you.
This is typically for listing the property, taking application, underwriting applications, signing that tended up to a lease, and then when the tenant moves in, charging the leasing fee.
The next fee I want to talk about is your traditional management fee.
Now there’s both flat fee management fee companies, and percentage based, just like the leasing fee.
It is important to note here we’re a flat fee company, which means we say, “Hey, no matter what the house is, we’re just gonna charge you a flat fee.”
And then there’s also percentage-based companies that will charge you a percentage of the rent collected.
What they say is, “Hey, the more rent we collect, the more money you pay us.”
We think that managing a $1,500 house, or a $2,000 house or a $2,500 house is very similar.
So, you shouldn’t be punished for having higher rent, but the other one says, “Hey, we want to be right in there with you, and as a percentage, you know if you get paid, we get paid.”
The next one is a renewal fee.
So, when the tenant renews the lease, this is typically annually, you’ll get charged a fee to do that. That’s called a renewal fee.
I’ve seen again, a percentage sometimes as much as 25%. I have seen flat fees. That’s what we charge, is a flat fee.
I think it’s a couple hundred bucks, 250 bucks. But the point is that there’s different types of renewal fees.
The next one is what’s called a repair and maintenance fee.
Repair and maintenance fee is charging to handle work that gets done at your house.
So, think about it like this, a tenant calls in and somebody sends a vendor out to your house.
Well, that vendor requires a ton of coordination back and forth. It’s not typically covered by the normal management fee.
What a lot of management companies will do is charge a percentage on top of the invoice.
If the vendor charges you a hundred dollars, then they’ll essentially add $10 on top of that to charge for the coordination of that maintenance.
Now we have an internal maintenance company, so obviously, we don’t up-charge that other than, you know, normal up-charge in the maintenance world, but a lot of companies use third-party vendors.
And sometimes we have to use third-party vendors for things like roofs, things like HVACs, in some cases things like foundation trees, things you don’t do all the time.
But so we do charge a small markup on that. But understanding and knowing exactly what the fees are, very important.
The next one is what we call optional services.
This is what are the things that you can get in addition to normal kind of everyday property management, kind of the nuts and bolts property management.
So, some things I came up with were, think about like getting your gutters cleaned.
This is not something that’s typically covered by traditional property management.
You may say, “Hey, I want to get my gutters cleaned.” Or your property manager may ask you, “Hey, do you want your gutters cleaned?”
And so going out there and cleaning those gutters would be an additional fee.
The other one is what we call eviction protection. So there’s a lot of management companies that are pooling some of the risk and basically offering a price to cover the cost of an eviction in the event that happens.
That’s an additional expense. And then the last one I came up with was like a quarterly inspection or a quarterly review of the house.
Going through, creating a report, just making sure the house is taken care of, sending you the report with pictures, that would be an additional fee too.
So, that’s it. That is how much do property management companies in Denver charge.
Keep in mind that there’s the leasing fee, the management fee, the renewal fee, repairs and maintenance fees, and then the optional services.
I’m Matthew Whitaker with evernest here in Denver. Super excited that you watched this. Thanks so much.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.
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