Our property management pricing structure is straight forward, doesn’t take a percentage of your income, and never leaves you wondering what you will have to pay for property management during any given month.

Here is a breakdown of what we offer:

Tenant Placement Plan:  Simply put, we do all of the upfront work with the marketing and showing of your property, finding and screening your tenant, and conducting your move-in inspection.  We then turn the property back over to you for you to self manage.

An added bonus to working with us, is you can also add on periodic inspections, maintenance oversight, and legal advice and eviction assistance as needed.

Essentially Management:  This program is the first tier of our full service property management.  With our essential management, we take care of all your property management needs.

 

The Cost for Property Management Based on a Percentage is a Disservice to Fayetteville Property Owners

 

The Cost For Property Management Can Eat Your Bottom Line!!!  

The cost for property management can eat your bottom line, so PROTECT YOUR BOTTOM LINE AT ALL COSTS! This is a common understanding in any business.

There are two results from not protecting your bottom line.  You either don’t make as much profit as you can, or you go out of business.

Why is your Fayetteville, North Carolina real estate investment any different?  Shouldn’t your goal be to maximize your return on investment?  The cost for property management is one of the things that can chip away at how profitable your real estate investment is.

Below we will explain in detail the current structure of most property management companies in Fayetteville; explain why this pricing for property management is flawed and a disservice to property owners; and offer you a better solution to control the pricing of your property management needs.

The Current, Antiquated, and Illogical Cost for Fayetteville Property Management

There is primarily one method by which property management companies in Fayetteville, North Carolina price property management services, this is a percentage based management fee.

When a property managers charges a percentage based fee, this means that the property management company will charge you a percentage of the monthly rent to manage your Fayetteville property.  In other words, the price for property management in Fayetteville, North Carolina is based upon how much money you collect in rent.

At Linchpin Property Management, we think that this method of pricing property management is inherently flawed, and we stand by our mantra of “All Properties Aren’t Created Equally, But All Landlords Should Be Treated Equally.”

To illustrate this, we will use a management fee of 10%, and compare three separate property owners in Fayetteville, North Carolina.

Let’s take, for example, Property Owner #1 charges $2000 a month for their rent.  This landlord’s cost for property management will be $200 a month to manage their property. Property Owner #2 charges $1500 a month for their rent, and her cost for property management is $150 a month. Finally, Property Owner #3 charges $800 a month, and pays his price for property management is $80 a month.

Now what do you observe about the cost and pricing for property management in the above illustration?

The pricing disparity for service is clear.  The landlords are all paying different rates, for the SAME EXACT SERVICE. The landlord paying more in property management fees, $200 in the above example, is getting the same service as the landlord paying $80 as a cost for his property management.

So you may ask yourself, and us, why is there a difference in the prices for the same service?

We don’t have a logical answer for this method of pricing, and neither do property management companies who charge based on this structure.

There isn’t a logical basis, or reason, for why property management companies charge you a higher cost to manage your real estate investment, when you are getting the same property management service as someone paying less.

Shocking isn’t it?

Now let’s look at a common scenario that we can all relate to, even if you aren’t a property investor.  If, for example, Bob went to a restaurant with John and James. They all ordered the exact same hamburger, but Bob was charged more than John because Bob could afford to pay more for his burger.  John’s price for his burger was more than James because John had slightly deeper pockets.

Well John would end up with a delicious burger, the same burger, while everyone else essentially made up for his portion of the tab.  So John was covering the extra costs.

Why should each of them pay a different price if they all ordered the same thing?  Wouldn’t Bob and John question the manager about why they had to pay more?

The situation changes if Bob ordered cheese on his burger, a side of fries, avocado, and other things which increase the cost of the burger. The price of the burger increases because Bob is getting MORE than what the others are getting, therefore the price would be different, and Bob has a delicious burger and a full stomach.

So Why Do You Have to Take on the Cost For Another Investor’s Property Management Service?

In short, we have no idea, and property management companies who charge you based on a percentage don’t either.

We can guess, based on over 22 years in the real estate business, from management, to sales, to being a realtor, as to why Fayetteville property management companies charge a percentage based pricing structure, and as a result a higher rate to manage your property. 

Here are some of the reasons why:

Spreading the Wealth of Revenue that the Cost of Property Management Brings

While your property may not be the cause of many problems with your property management company, other properties may occupy more of the property management company’s time.  As a result, to make up the difference in manpower and cost for managing properties which take up more of their time, you are paying a higher cost. Why should you have to pay for other tenants in properties that don’t affect your property?

Your Property Management Costs are Covering Overhead and Fat of Other Real Estate Sections

The cost of property management isn’t always for the benefit of the property management company.  Are your funds being used SOLELY for the administration of the property management office, or is the price you pay being used to pay for overhead in other sections of the property management or real estate company. Property management provides a consistent income, whereas real estate sales and construction are not consistent. It is highly likely that the fees you pay are being used to supplement the lost revenue in other departments. You are paying for the marketing, building rent/mortgage costs, staff, utilities, office supplies, computers, company parties, and salaries, that have no direct benefit to you as a property owner.  Why are you paying the price for other services a company is performing, if you aren’t using those services?

At Linchpin Property Management, 100% of our company is dedicated to the management of properties.   As a result, you know the money you pay, all of the costs, is spent with property management at the forefront.

Your Price for Property Management is Increasing Revenue for the Company Without Having to Do Any Additional Work

Your rent goes up, the fees for management go up, and the property management company gets all the benefits.  A percentage based property management fee structure is a way for property management companies in Fayetteville to increase their income without doing any additional work. As you can see, from the above example, property management companies charging a percentage based fee structure are receiving an increased revenue in exchange for providing you nothing in return. WITH NO VALID EXPLANATION. 

At Linchpin Property Management, we offer a flat fee pricing structure that is not offered by any other Fayetteville property management company.

Why is A Percentage Based Pricing Structure For Property Management a Bad Thing? 

Let’s go back to our first statement about protecting your bottom line at all costs.  As a property owner in Fayetteville, North Carolina, you must first consider the fact that your property is an investment. In other words, you are a real estate investor.  What the cost, price, and fee, of a percentage based property management company does is reduce the cash flow to your pocket each and every month, year after year, and provides nothing to increase your value.

Applying the Math of the Cost of Property Management and Loss Investment Potential.

Our flat fee property management pricing structure provides you, as a Fayetteville property owner, with transparency as well as a greater return on your investment.

In the earlier example, Property Owner #1 pays $200 a month, or $2400 a year, for the cost of property management. Under our pricing fee structure, he would pay $100 a month, or $1200 a year. A net savings to Property Owner #1 of $100 a month or $1200 a year. Property Owner #1 is then able to invest that $100 a month, or $1200 a year, back into the property by making extra payments toward the principle, thus reducing the amount of his long-term mortgage debt.  Think about the vast amount of money you could save on the cost of property management services, over the long term, with just a $100 a month additional payment!

Alternatively, Property Owner #1 can take that $1200 first year savings, and place it in an account that compounds interest (ala Warren Buffett) and gain additional revenue back. The even smarter investor will take the additionally $100 a month, and add that in.  With a return rate of 10%, as an investor, you end up with almost $24,000 at the end of 10 years.  And that is a modest rate of return, not taking into account adding any additional amount.  This is passive income that relies on little to no effort by you as the property owner.

And finally, think about the dollars saved, and the magnified investment potential when you have multiple properties.  The amount of money will be shocking.

Put the Cost For Property Management Back to Work For You!!!

 

At Linchpin Property Management, our flat fee doesn’t mean we devalue the property management services we offer to Fayetteville property owners. In fact, our pricing structure allows us to provide better quality services to you, while assisting you in increasing the net revenue on your real estate investment.  This means we help you get more money back in your pocket.

The current state of pricing property management services in Fayetteville, North Carolina, that is founded on a cost to the property investor based on a percentage of rental income, is an antiquated, disservice, to the property investor.

A mindset shift has to occur.  Your rental property is no longer your home. Your rental property is now an investment in your future, and should be managed accordingly.

Check our our pricing structures below, and let us know if you have any questions.

The Team at Linchpin Property Management

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