Attorney · Forest Hills, NY · Member since 2019 · 73 posts · 57 votes
Hello all"
Ive been looking into a few turnkey companies and I am in the process of vetting one that uses an outside property management company. I''m trying to get a better understanding of their fee structure and what is standard. would anyone be able to provide any insight? Basically, I'd like to know what are standard charges. I understand the percentages might differ across markets, but I'd like to get a rough idea. For example, is it standard for a property management company to charge a 25% fee if a tenant cancels his lease before the term ends? Or to charge the owner an hourly rate for an employee of the company (in addition to the attorney) to appear in court? any and all insight would be greatly appreciated
@Marky Suazo As you said, it varies across markets, but the averages are usually not too far apart. Property management fees will typically cost you about 10%. Where we're at, lease renewals for existing tenants are anywhere from 25-60% of one month's rent, and lease-ups can be anywhere from 50-100% of one month's rent (there's usually a minimum dollar amount to these, and that is based on the class of rental/rental amount). We've never charged a fee if a tenant cancels their lease, and we've been doing this for a long time over hundreds of units, so that's a bit weird! That's already covered by the re-leasing fee, so are they charging a fee for the cancellation PLUS a re-leasing fee??
We've also never charged any kind of fee on top of the attorney for evictions/court appearances. That certainly seems excessive. I guess it might be normal in some areas for an outside property management company to do that to try and get money wherever they can, though, as they usually run thin margins. We do everything in-house, so maybe that's the difference.
Are you comparing several companies in the same area? That's what I would do. Call a few and just compare everything directly. Even if you're not actually going to use the others, having more information and data to base decisions on is NEVER a bad thing, and property management companies should always be eager and willing to provide all of this info to you upfront. :)
Ive been looking into a few turnkey companies and I am in the process of vetting one that uses an outside property management company. I''m trying to get a better understanding of their fee structure and what is standard. would anyone be able to provide any insight? Basically, I'd like to know what are standard charges. I understand the percentages might differ across markets, but I'd like to get a rough idea. For example, is it standard for a property management company to charge a 25% fee if a tenant cancels his lease before the term ends? Or to charge the owner an hourly rate for an employee of the company (in addition to the attorney) to appear in court? any and all insight would be greatly appreciated
A Turnkey company that uses outside management is NOT a True Turnkey. They are pretty much just acting as agents. Who do you hold accountable if something goes wrong with the property they just renovated? If there is already a tenant in place won't they be confused when the management changes?