How Much Does Property Management Cost In The Inland Empire?

How much do you charge?

That’s the number one question we get asked when a property owner calls us because they are interested in renting out their home. There are dozens of property management companies in the Inland Empire and they all seem to have a different pricing structure.

Why is that? What’s the difference?

Asking about price first is almost always a sign of an accidental landlord. Accidental landlords are homeowners that never intended for their home to become a rental property, but life circumstances are taking them out of the home for whatever reason and they would rather rent the house than sell.

These aren’t intentional investors that bought the home strictly as an investment so they typically have a higher emotional attachment to the home and have little to no experience with dealing with tenants or property managers. They have a mortgage on their home and are worried about covering all of their expenses and hopefully having some profit left over.

This isn’t a wrong question to ask, but it’s probably a question that should be asked closer to the end of a conversation, not right off the bat. Chances are you can weed out several property management companies before ever getting to the questions of price by asking them the right questions and knowing how they should be answering to benefit you.

There are really five main questions that accidental landlords have when deciding how to go about renting out their home: should I hire a management company or rent it out myself? How much does a management company typically charge? Is the cost of a management company worth it? Can I actually make more money renting out through a property management company than I can on my own? How do I decide which company to go with?

Should I hire a management company or rent out my home myself?

This questions strictly depends on your circumstances. In the Inland Empire, approximately 70 – 80% of rental homes are managed directly by the owner with no property management company involved.

Why is that?

The truth is, property management companies don’t have a great reputation with landlords. They are notorious for not returning phone calls or always seeming to be “on the tenants side.” That is changing in recent years as more and more companies enter the industry, but reputations take a long time to change.

Historically, it has also been relatively easy to rent out your home yourself. There were few legal hurtles and the number of laws you needed to be compliant with were also less. Over time, more and more laws have been created directly regulating rental homes which means landlords need to be up to date and compliant with landlord-tenant law.

Even if you get a great tenant, rental homes take a up a lot of time. If you don’t have responsibilities that keep you from the job of managing your home, you may be just fine renting it on your own.

If you don’t want to show the home to prospects, manage repairs, collect rent every month, negotiate leases and rent prices, answer the phone at all hours of the day, serve notices, or visit your property several times throughout the year, finding a good property manager may be right for you.

The number one expense in rental property is vacancy. The longer your home sits vacant, the more money you lose. If you aren’t readily available to help out your tenants, they are going to get frustrated and move out as soon as they get a chance. So even if you can take a few weeks off work to get your home rented, will you be able to maintain a level of service that makes great tenants want to stay for years and years?

How much does a management company typically charge?

In the Inland Empire, this number has a surprising range. Property management isn’t a commodity like gas or milk that is generally priced the same based on region and quality. Property management is a service that if done correctly should provide you with ultimate peace of mind that ultimately justifies the amount you pay.

There are a multitude of different services that property managers can charge for, but the main one everyone talks about is the monthly management fee. It’s really easy to compare companies side by side and determine which one charges less per month. That doesn’t necessarily make them the cheapest company though.

Some management companies will charge a really low monthly fee but then charge a lot of extra fees to make up for it. Their monthly fee sounds really low, but in reality they are getting a lot more out of you every month with other fees like admin fees or maintenance markups.

They also may have a special fee structure for the first year and then drastically raise their rates the second year. Make sure when comparing companies, you ask about all of their fees, not just their monthly management fee.

But, since the management fee is what most people want to know about, let’s dive in and see what companies charge.

There are really two ways that property managers will price their services:

  1. Flat fee based.
  2. Percentage based.

Flat fee companies will generally have a monthly fee that doesn’t vary based on rent amount. The will rent out your $1k/month studio or your $4,500/month mansion for the same fee.

The good in the flat fee instead of percentage model

It’s great to know exactly how much you you are paying each month. As rents go up over time, you never pay more for a management fee. Typically, flat fee companies will charge less than percentage based companies, but may be making up for it in their other service fees.

Flat fee companies run off of the thought that higher rent doesn’t mean more difficult to manage, so they just charge a flat fee for all types of properties. This comes across as very transparent, and many property owners like this.

The bad in the flat fee instead of percentage model

The old saying, “you get what you pay for” certainly rings true here. If one company seems drastically lower than other companies, there’s probably a good reason for that.

Flat fee companies that are priced much lower than their percentage based competitors will have a multitude of problems down the road. Low prices tend to attract cheap owners. Cheap owners tend to own low value, low rent properties that aren’t in very good condition. These properties usually house difficult tenants.

This means that low priced company is constantly dealing with conflict between tenants and owners alike. No one is happy in that office. Staff burns out quickly and probably turns over rapidly. The company isn’t making enough money to adequately compensate their employees and doesn’t have room to grow and provide more services to their clients. This results in poor service to you and your tenants and a frustrating experience all around.

But hey, at least you’re saving a couple bucks a month in management fees, right?

This isn’t to say that all flat fee companies are cheap. Some have a very high flat fee that negates the problems addressed above.

We’ve seen flat fees range from $89 – $250/month in the Inland Empire. It’s a safe bet that the $89/month companies have a lot of other fees, or they’re trying to break into the market. The $250 company may be all inclusive and have absolutely no other fees.

Why percentage based?

Percentage based is how most companies in the Inland Empire price their services. They take a percentage of monthly rent collected that typically ranges from 5 – 10%.

This means the higher they price your home, the more they are making in management fees. This can help you rest assured that when their rental analysis comes in several hundred dollars less than what you thought it would rent for, they really are trying to get the most out of your home because ultimately that means more money in their pocket. If you think their analysis is too low, it could be that yours is too high.

Every year when the lease comes up for renewal, they are also going to be a lot more motivated to see if an increase is in order. They make more per month if they successfully negotiate a higher rent with the tenant, and so do you. Flat fee guys get paid the same with or without rent increases and guess what? Rent increases can be difficult so they may advise you not to raise the rent at all so they don’t have to deal with it.

Is the cost of a management company worth it?

Now that you understand the costs of property management, you have to decide if it’s worth it for you. As mentioned earlier, what you are really paying for is peace of mind. Your property manager is your fiduciary agent. If they take this seriously, that means that everything they do is supposed to be in your best interest.

For a lot of people, establishing trust with their property manager and then being able to stop worrying about their property is well worth the cost. There’s no better feeling than knowing you can trust an expert to manage your asset and put the most money in your pocket while minimizing your risk as much as possible.

If you don’t trust your property manager, maybe it’s time to find another one. Or maybe the relationship is just too new. It will take time and experience with a property manager to build trust and be able to gain that peace of mind.

Can I actually make more money by renting out through a management company than I could on my own?

Yes! Even after the costs associated with professional management, how much you make from your property over several years can actually be more than if you had tried to do it all yourself.

Several owners that hire property managers after managing themselves after many years find that they are way under market on their rent because they haven’t been doing correct rent increases over time or they didn’t understand the rental market when they originally rented it out.

Just like we talked about before, the number one expense is vacancy so if your home is sitting vacant for weeks or months out of the year, chances are you are making significantly less than you could be if you had a professional manager minimizing that vacancy as much as possible for you. After all, you probably aren’t available 7 days a week for most of the day like your property manager can be to show the home to potential tenants.

How do I decide which company to go with?

So with so many companies out there, which do you choose? The cheapest? The most expensive? The ones with the best online reviews?

All of these are factors, but when you interview different manages, you should have several questions ready to ask them. Also pay attention to how long it takes them to call you back, how punctual they are when they meet with you and whether or not they ask you questions.

If they take forever to call you back when you reach out inquiring about their services, chances are, they will do exactly that when managing your home. And if they aren’t asking you questions, chances are they sign up every owner that walks through the door, which means they are desperate for business and aren’t selective with who they work with.

If they aren’t getting to know you or taking the time to understand your needs and situation up front, they probably aren’t going to manage your property well. You may notice this to be the case with the cheapest companies out there.

Just remember, you get what you pay for!

As a last thought, make sure you have an easy out in case your property manager turns out to not live up to all of their promises. Most contracts are for one year, but can easily have a 30 day cancellation clause added. Be very wary of a company that wants to lock you in for at least a year so you can’t jump ship if they aren’t doing their job.

If after all this you still aren’t sure if property management is right for you, check out our self-managing landlords guide. You will find a ton of information that will be very helpful in managing your own rental home.

Meghan Miller

Accounting

Meghan is one of the newest members of our Mesa Properties Inc. Team and works in our accounting department. She studied accounting at Chaffey College. Prior to joining Mesa Properties Inc., Meghan was a bookkeeper for 6 years at a CPA firm that primarily worked with dairy farms. She enjoys working for Mesa Properties Inc. because she is able to use her accounting experience in whole new ways and also enjoys the friendly office environment that has been established here. Meghan resides in Rancho Cucamonga with her husband and two sons.

Rebecca Anthony

Administrative Assistant

Rebecca is one of our administrative assistants and is one of the warm and friendly voices you will hear when you call our office. She has a strong customer experience background from her past role with Sprint and loves assisting our owners and tenants. When she isn’t working, Rebecca loves to bake and spend time with her son and family.

Steve Shwetz

Managing Broker

Steve, the Managing Broker and Founder of Mesa Properties Inc. & Mesa Real Estate, began his real estate career buying, fixing and reselling distressed properties in Southern California. Seeing the long-term opportunity in a buy and hold strategy, Steve began acquiring residential real estate to build his own real estate rental portfolio. As a 10 year owner of an international service franchise, Steve saw an opportunity to take his experience in customer service and developing systems and processes and apply that experience to the world of property management and real estate. Prior to starting his own businesses Steve held various senior and advisory level sales positions with IBM Corp., B. Braun Medical, Insight Direct & Reach Local. Steve is a licensed real estate broker and holds a Bachelors in Business from the University of Southern California.

DRE: 01881471

Sheryl Shwetz

General Manager, Administration

Sheryl helped to establish Mesa Properties Inc. with Steve. Today, she serves as the backbone of all things administrative for the company. Sheryl oversees all the details of running a property management company including on-boarding new owners, converting applicants to tenants, and paying all vendors. After earning her B.S. in Business Administration from the University of Phoenix, Sheryl worked for a software development company running the support and training department and writing user documentation. Sheryl also gained experience at an advertising agency servicing non-profit organizations where she drafted vendor instructions for merging customer data with various fundraising campaigns. Sheryl has 3 sons and home-schooled them through various stages of their K-8 education. Each one is now thriving in adulthood.

Sam Shwetz

Business Development Manager

Sam is the Business Development Manager at Mesa Properties Inc. focusing on engaging both new and existing owners of residential and commercial properties.  Sam is a U.S. Navy veteran having served in the Nuclear Field on the USS Ronald Reagan aircraft carrier.

After his military service , Sam worked for a lighting control company as a field service engineer on various projects including extensive work on Apple’s new corporate headquarters in Cupertino California.

Sam and his wife Sydney are homeowners in Ontario, CA where they live with their golden retriever.

DRE: 02069937

Verenice Guardado Alvarado

Lead Office Administrator

Verenice is the office administrator to our Mesa Properties Inc. Team. She is also licensed and manages properties in the high desert. She earned her Associate’s Degree in Business Administration from San Joaquin Valley College and used her skills working in customer service. Previously, Verenice worked 4 years with Target where she trained sales associates and developed strong communication and teamwork skills. Through her position at Mesa Properties Inc., Verenice strives to find the right tenant for each owner and the right home for each tenant.

DRE: 02036438

Mark Parmenter

Property Manager

Prior to joining Mesa Properties Inc., Mark worked in the construction industry as a member of the carpenters union. He holds an Associates degree in Business, he is a licensed agent, certified in property management and enjoys the unique challenges of property management. Mark is a homeowner himself and experienced with on site multi-unit management. He understands the delicate balance of working with tenants as a landlord, owner and neighbor.

DRE: 01981906

Joshua Long

Property Manager

Joshua is a property manager to the Mesa Properties Inc. team. With a background in sales, Joshua gained the strong communication skills necessary to be an effective problem solver when handling any situation he is faced with. Growing up, Joshua watched his mother work as an apartment manager for over 20 years. Now, as a property manager, Joshua focuses on addressing the needs of both renters and homeowners. He is a focused hard-worker who ambitiously seeks to become better in his position and to gain more knowledge at whatever task is at hand. Joshua is an Upland area native and is a licensed real estate agent. He currently holds 2 Associate’s Degrees and is working towards gaining his Bachelor’s Degree in Business Administration from CSUSB.

DRE: 01998522

Bridget O'Gorman

Assistant Property Manager

Bridget is now a property manager to the Mesa Properties Inc. team. She currently resides in Victorville with her daughter. In 2014, Bridget obtained her Associate’s Degree in Business Administration from San Joaquin Valley College with a 4.0 GPA. Prior to working for Mesa Properties Inc., she has held various customer service jobs, where she gained better understanding of how to handle different situations and how to work with each person on an individual level. In addition, Bridget worked as a safety manager and recruiting assistant for a transportation company, giving her experience in processing applications and completing safety inspections. Bridget enjoys working for a company where she is able to assist others and to work in a changing environment, which is always giving her a chance for a new experience.

DRE: 02040663

Julia Morrison

Property Manager

Julia is a property manager to the Mesa Properties Inc. Team! Julia currently holds an Associates degree in Criminal Justice. She is currently enrolled at CSUSB with plans of going to law school after. Having worked 4 years in a customer service field, Julia has gained much experience in working with difficult situations and learned how to be a team leader. Prior to working in customer service, Julia worked for an HOA, where she gained computer & phone skills and learned how to handle an overflowing stack of paperwork! She enjoys working with people and assisting them in finding a home that they love. Julia became a homeowner in 2016 and currently resides in Upland with her fiance.

DRE: 02040250

Autumn Janda

Tenant Screening

Autumn gained her real estate license in 2011, but has been in the property management field since 2005. She obtained her Bachelor’s degree in Business Administration from CSUSB in 2009. Prior to joining Mesa Properties Inc., Autumn gained much of her experience being an assistant property manager for commercial properties for six years! She also spent five years working in a company that worked with commercial, industrial, and apartment properties. Autumn enjoys working for Mesa Properties Inc. because she gets to work with new tasks everyday and likes meeting new people. She is currently a homeowner in Arizona, where she resides with her husband and daughter.

DRE: 01765918

Donna Pulver

Receptionist

Donna is the receptionist to our Mesa Properties Inc. Team since November of 2016! Her tasks include answering calls, scheduling showing appointments, processing adverse action letters, assisting with applications, and assisting customers in the front desk. Having worked over 25 years for a real estate appraisal company located in Covina, Donna has gained much experience in providing great customer service. Donna currently lives in Victorville.

Carmen Franco

Administrative Assistant

Carmen is one of the newest members to the Mesa Properties Inc. Team! Her tasks include showing available rental properties, assisting with phone calls, and completing inspections. Carmen graduated from University Preparatory High School in 2011. She has earned her certificate in Business Administration from San Joaquin Valley College with a 4.0 GPA. Getting to know the team at Mesa Properties Inc., Carmen has been inspired to pursue a career in property management. She is eager to learn more about property management and prides herself in bringing a positive and caring attitude to everyone and everything she does. Carmen resides in Apple Valley with her husband and 2 children.

Amairani Palacios

Transaction Coordinator

Amairani is the transaction coordinator to the Mesa Properties Inc. Team! Her main role is coordinating real estate transactions for the real estate agents. Her other tasks include assisting the property managers with inspections, calls, and emails. Having been a member in the AFJROTC program for Victor Valley High School for 3 years, Amairani has gained experience in coordinating tasks and working with other team members as a Team Leader. Amairani has completed the needed real estate courses and is working on obtaining her real estate license.

DRE 02049281

Michael Melendez

Real Estate Agent

Mike has been practicing real estate in Southern California since 2006. His family and friends have always been involved in home loans, new construction, and rehabilitation projects, deepening his knowledge of all aspects of the industry. As a Realtor, Mike’s service’s consist of helping buyers and sellers obtain property that best suits their interests. Finding his clients great deals, maximizing their proceeds and finding them the right home is what he does best. Mike understands that real estate is one of the biggest purchases and sales that can be made, and choosing the right agent is an important decision. He has both the experience and technology to help his clients meet their goals.

DRE: 01781635

Sonya Dod

Real Estate Agent

Sonya Dod has been a licensed real estate agent since 1989, Sonya is an agent who facilitates successful transactions for buyers as well as sellers, boasting a solid reputation for making deals with honesty and integrity. Since Sonya was raised on a Texas farm, she isn’t afraid of hard work and long hours. After her parents moved to California 40 years ago, they started buying investment properties. So she grew familiar and comfortable with the process of finding, fixing up and selling properties at an early age. Having served as an underwriter, processor and loan officer, Sonya has the knowledge and experience necessary to help sellers and buyers avoid wasting time opening meaningless transactions. What’s more, sellers are protected by her expertise as she requires buyers to provide written permission to speak directly to lenders. This unique approach fosters quickly closed deals and eliminates false representation.

DRE: 01055445

Raymond Palacios

Administrative Assistant

Raymond is an administrative assistant to the Mesa Properties Inc. Team! His tasks include performing inspections, showing properties, serving documents, and assisting with phone calls. Raymond holds a Bachelors in Business Management from California State University of San Bernardino. Having worked 4 years at a customer service field, Raymond has gained much experience in assisting and providing great quality customer service. Prior to working in customer service, Raymond volunteered and worked 6 years for a food distribution center where he gained the experience in efficiently coordinating important tasks within a company.