Find Top Local Residential and Commercial Real Estate Management Companies in Your Area

Turnkey property management fulfills many functions—from the development of real estate to changes in ownership.

As an example, a group of investors purchase land to build a large office complex. They hire one of the top property management firms to fill vacancies as office space is constructed. The firm manages all contracts, collects all rents, and handles all tenant disputes. In addition, the firm manages the maintenance of the buildings after construction—external, such as grounds keeping, and internal, such as building repairs.

When the original investors decide to sell, the firm serves during the transition to preserve or renegotiate contracts with current tenants.

A property management company can also provide limited services. As an example, a single investor has rental property consisting of four townhouses or condominiums. The investor takes care of building maintenance. The management company is responsible only for keeping the units occupied and collecting the rents.

The rates that property management professionals charge depend on the services they provide. If they only deal with tenants, their prices will be lower than if they provide full management of rental properties.

As an example, the fee for finding a new tenant for a duplex is typically between 50 and 75 percent of the first month’s rent. For the remainder of the lease, they might charge as little as eight percent per month. This rate will increase if the manager is responsible for managing building and grounds maintenance.

Property management companies charge more for vacation rentals, such as a rental listed on Airbnb. Because of the short term nature of vacation rental leases, keeping them occupied requires more work. These increased costs result in management fees that can vary widely, depending on the location.

Property managers typically charge from 20 to 25 percent of rental revenue for big-city vacation rentals. Beach rentals follow, with rates of 25 to 30 percent. The most costly vacation rentals are usually mountain properties. Because they are far apart and require more maintenance, companies typically charge between 30 and 35 percent.

A property management company’s main responsibilities include keeping a property in good condition, finding renters, and collecting rent from them.

An asset or wealth management company provides management of the money side of real estate holdings. They not only determine how best to rent a property, but also when it should be sold, how the money should be reinvested, and what new property should be acquired to grow the client’s wealth.

A real estate investment trust (REIT) will hire an asset manager to maximize the profits of a commercial building, for example. Whereas, the property manager carries out the decisions of the asset manager.

Banks frequently hire asset managers to manage their real estate owned (REO) assets, until those foreclosed properties can be sold.

If you want to acquire a multi-family home to generate rental income for you, ask yourself if you have the experience or desire to manage it on your own. Do you know how to attract new tenants to fill vacancies? Do you have the negotiating skills to deal with difficult renters? Do you have the time to deal with house problems that can develop (often when most inconvenient)? If not, a property manager’s percentage of rental revenues may seem like a good trade-off.

A property manager for a large commercial real estate (CRE) complex might cost as much as fifteen percent of rental revenues, if they have the responsibility of building and ground maintenance. If the building has a large amount of vacant space, a flat management fee is usually charged—based on the size of the property.

Sometimes, property managers charge a percentage (2%-4%) of gross receipts, which can include such items as additional services the tenant may require above and beyond the building standard.

State and local statutes regulate property management companies. Property managers are generally licensed in the states where they operate. Continuing education and payment of annual fees are usually required to remain in good standing. A property manager has a fiduciary responsibility to oversee their clients’ interests without any self-dealing. They must avoid self-gain that would work to the detriment of their clients.

Generally, changing property management companies requires the settling of any existing contracts. With no violation of agreements or infractions of state or local statutes, the contract must run its full term, or the manager reimbursed for early termination. If the property manager has violated the terms of the agreement, the relationship can be terminated at any time. Our list of the best real estate property management companies will help provide you with reputable property managers to choose from.

General maintenance fees, such as those for mowing, trash removal, and snow and leaf removal, are the responsibility of the property manager (if specified in the agreement). Usually, repairs are paid for from a reserve repair fund—a separate account that the landlord puts money into for necessary building repairs. Reserve repair funds are usually set up for the property manager to use at their discretion—with only major purchases needing the approval of the property owner.

Before negotiating the terms of an agreement with a property management company, determine what responsibilities you want to assign to the property manager. Make a detailed list and discuss each point thoroughly. The better job you and the property manager do in defining responsibilities, the more profitable the relationship will be in the long term. Understand the property manager's fees for any additional duties or special circumstances that might occur.

Some of the most important things you want to ask about are:

- How many years the company has been operating.
- If they are licensed.
- How long their average relationship with a client is.
- If you can do a walkaround og some of the properties they manage.
- Their working hours.