Complete Guide to Property Management Fee Structure

Property management fees are not set by any government agency. Therefore the fees that companies charge vary widely as do the services they provide. It is important not to base your decision to choose a company solely on the fees they charge. However, hiring the most expensive company rarely equates to receiving the best results.

Following are basic fee structures commonly used in the industry:

Lease-up Fee: When you have a vacancy that needs to be filled, your property manager or any licensed Broker will typically charge you a fee to fill the vacancy. The fees vary from a flat fee to a percentage of the lease term or percentage of the first month’s rent. The most commonly used formula is a percentage usually 50-100% of the first month’s rent.

Our Lease-up Fee is 60% of the first month’s rent.

________________________________________________________

Management Fee: When you hire a company to manage your rental property, you can expect to pay a fee structure based on a percentage of the income or a strait flat fee. This fee generally does not include any lease up fee or range of other fees associated with full management, which are listed below. The basic management fees generally range 6-10% of the rent collected. The bottom line is that the fees are negotiable and you should do your research before you sign the agreement.

Our Management Fee for the average single family home is 8% of the Gross Rent. However, we may provide a discount on Higher-End Homes and Multi-unit properties.

________________________________________________________

New Account Set-up Fee: There is usually a fee charged to establish the account. This is usually to cover the cost of transferring all the information from owner or prior management company. This fee will also cover the extra work involved in the initial inspection of the property some companies perform. This fee is usually $200-500.

We currently charge no New Account Set-up Fee.

________________________________________________________

Vacancy Fee: Some managers will charge a fee on vacant units. Though this is not a common practice, however some companies will require it. This fee is usually $25-100.

We do not charge a vacancy fee on any property that becomes vacant.

________________________________________________________

Advertising Fee: Some companies will charge the owner for some or all the advertising fees. This will depend on the type of property or the type of advertising requirements.

We currently charge no advertising fee.

________________________________________________________

Lease Renewal Fee: Some of the companies charge a fee every time the lease is renewed. This fee can range from a flat fee of $100 to a percentage of the term of the lease or the 1st month’s rent. Much like the Lease-up fee mentioned above.

We currently charge no Lease Renewal Fee.

________________________________________________________

Late payment and check returned fee: Most managers charge a fee on late fees collected from tenants. They range up to the full amount collected.

We currently charge 50% of Late Fees charged and collected from Tenants. We keep all Check Returned Fees.

________________________________________________________

Maintenance Fee: Some companies will charge a percentage of the cost of maintenance work performed on the property. This is especially true for repairs that are outside of normal handy man or plumber minor repair calls. Considering that the manager will help in contracting out the work, help with getting bids and overseeing the entire process. These fees can range up to 10% of the cost of repairs.

We currently charge no Maintenance Fee on all repairs under $5,000 and 5% on repairs over $5,000.

________________________________________________________

Eviction Fee: Property managers may charge for serving notices or appearing in court for evictions. In most cases the fees are charged per hour basis (typically $20-100 per hour) based on the amount of hours spent, or charging a flat fee for a court appearance or serving the tenant.

We currently charge no Eviction Fees.