Should Property Managers charge an additional fee to find tenants?

[Nathan J.]

Hi all,

It seems some property managers look to charge one months rent to find a tenant, on top of the 10% of rent collected. Is that normal? It seems that a property manager should be incentivised to keep tenants long term, rather than get paid for regular turnover?

[Dawn Anastasi]

People who do not go through the process of getting good tenants do not know what it is like -- advertising, returning calls and emails, having showings, taking applications, screening, calling those who are denied back, calling those who are approved, collecting security deposits and first month's rent, etc.

It's a lot of work and I can't imagine anyone who would do it for free.

That being said, the PM should be able to justify in writing why they think the applicant would be a good tenant for the rental.  They should have written screening criteria and the applicant should meet all the criteria.  E.G. Credit score of X, or no money judgements, no evictions, etc.

You literally cannot predict human behavior ... a good tenant can turn into a bad tenant through no fault of the PM.  If the PM turns over the unit once a year then they don't seem to be a very good PM -- unless yearly turnovers are common for the area (for example, student housing).