As a real estate investor, hiring a property manager can be one of the best decisions you make. Today, we’re speaking with Scott Raymond—founder of Raymond Property Management, now part of Mynd—about the sorts of expenses or fees an investor must account for when deciding upon the right company to manage their property or properties.

Alex Osenenko: Boys and girls, Alex with Mynd Property Management. Today we are talking about investing in Sacramento and how to be successful in doing so. Specifically, Sacramento real estate. I have a guest to help me unpack this vast topic and his name is Scott Raymond. Scott, how are you?

Scott Raymond: Hey Alex. Doing great. Thanks for having me.

Alex Osenenko: Yeah, we’re lucky to have you, man. Ten years of successfully investing in Sacramento area. Founder of a company called Raymond Property Management, which is now part of Mynd. And today, Scott and I are—well mostly Scott—is going to unpack the question: what does property management in Sacramento cost?

Scott Raymond: Yeah, this is a good one. Obviously a topic near and dear to many investors looking for property management companies in Sacramento. So basically property management companies in Sacramento generally either charge on a percentage of rent collected each month, like five percent and up to as high as eight or nine percent, or a flat fee per unit per month. So typical management fees would range from say $75 per unit per month to as high as $150 or $175 per unit per month. If you had say ten units, and the rate was $100 (per unit) per month, you would expect to pay somewhere around $1000 per month for that property.

The next typical leasing property management fee that’s charged in Sacramento is leasing fees. These are essentially commissions that the property management company charges to lease up a unit. And they also can either be a flat fee of say like $250 or $300 for each new lease or they could be a percentage of the actual rent or the first month’s rent. Many companies charge anywhere from 25% to 50% of the first month’s rent. So, for example, if the property management company leased a unit for $1000 and the rent was $1000 per month, the cost for that lease up would be somewhere between $250 to $500.

For companies that basically have their own in-house maintenance staff in Sacramento—they generally bill them out at hourly rates of between $55 per hour up to as high as $95 per hour.

Other types of costs for property management companies in Sacramento include markups on vendors like HVAC and plumbers and electricians, administrative fees for posting notices, collecting utility reimbursements and those sorts of things.

So one thing that’s really important to keep in mind in closing is the lower the base fee from the property management company, the more likely there will be a bunch of other different fees that they charge you for throughout the process, while some companies in Sacramento offer an all-inclusive price. So, it’s really up to you to kind of vet those out and see which one’s right for you.

Alex Osenenko: Excellent. That’s good. Lots of wisdom here, Scott. Thank you very much for sharing.

Thank you for watching to our viewers. If you find this on YouTube or other video sites, go to mind.comynd.co and you’ll find a number of episodes that Scott and I have done on and around investing in Sacramento.

Scott, thanks a lot for your time.

Scott Raymond: Thanks, Alex.

Alex Osenenko: And thank you for watching.

A property management company can provide investors with the infrastructure and expertise to save them time and money. But this can come at an expense. Whether they are providing in-house maintenance or supervising the leasing process, it is imperative to know not only what types of services your property manager provides, but what these services will cost. As hiring a property manager can mean the difference between staying afloat and creating a profit, an understanding of these fees is crucial in making your investment a long-term success.