Increase of Rents with Increase in Property Management Income

[Marc Mahadeo]

Question to the BP Network-

With the steep increase in rents in the marketplace.  Is anyone seeing adjustments to Property Management fee percentages?  What is fair?  At what volume should a discount be discussed? 10 units? 20 Units? 20+?  It is a needed function of my team, but it is a large expense.  Love to hear how some have overcome or dealt with this situation.  Thanks in advance.

[Nathan Gesner]

Quote from @Marc Mahadeo:

The reason property managers charge a percentage of income is because they get an increase every time they raise the rent. They only have to change their fees if they are a flat-fee company (e.g. $100 per unit). I haven't seen a flat-fee company remain a flat-fee company for long.

I've overcome it by adding fees for ancillary services. Airlines charge $500 for a plane ticket, then they tack on taxes, baggage fee, booking fee, and sell you a 3.4oz bottle of wine for $9. Property management is going to the same model with a % of rent as the management fee, then additional charges for new leases, renewals, inspections, work outside the scope of management, application fees, add/remove tenant, add pet, etc.