For people thinking about getting into residential (or commercial) real estate investing, there is an option of how you want to manage your investment.
On the one hand, you can deal with all of the "field operations" issues yourself. This means everything from running FOR RENT ads to dealing with evictions and everything in the middle.
If that doesn't sound like your cup of tea, and for some it is not, you can consider utilizing the services of a professional property manager. Should you decide to go this route in Ohio, the first thing to understand is that, unless you are making the manager an employee, you must utilize a licensed real estate brokerage. This probably isn't a bad idea anyway since professional property managers do this for a living and Cousin Earl doesn't.
There are a couple of costs when hiring a manager. Depending on who you hire, you will pay a management fee which is a percentage of all money collected by the manager. This can include base rent, late fees and utilities. Each company has their own fee structure and I would be happy to share mine, just call. Can't post it here due to Federal Regulations. Keeping legal is important !!
Second, you may be charged for lease renewals and/or new leases that the manager secures for you. This is not usually too high of a number.
Third, there may be a charge for managing an eviction. This is also a fairly nominal fee for the manager and there may be an attorney fee in addition. Attorney fees for eviction can be $250 and up, but they get it done right. Your manager can also steer you to attorneys that have this down to a science.
Another cost may be the advertising of your properties. Costs here vary, but are usually just a pass through expense for the manager and you will have them if you self manage too.
Lastly will be any maintenance expenses for materials and contractors. Some managers have staff members that can do much of the maintenance and some contract all of the work out. Subcontractors will bill by the job, while staff maintenance guys are charged to the owner at anywhere from $15 - $35 per hour, plus materials.
These costs may not apply in all areas, but seem to be fairly common in Columbus, OH.
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Gryphon Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
Rich,
Similar laws regarding property management in Tampa, Florida... I am personally trying to alter the perception and value propositions here though. I have asked the question here on ActiveRain:
Do property managers need to re-evaluate value propositions for the emerging market?
While the laws may not change, what property managers offer as services within those laws probably can and will.
Why can't you post your fee's here? Federal regulations?