Customary Property Management Fees?

[Matt Holmer]

Good afternoon-

I am reading over a potential PM agreement and want to confirm that the PM charges are reasonable and customary.

1) 75% of one month's rent for tenant screening/placement. (Seems reasonable)

2) 8% monthly management fee (Really 14%/year when including the screening fee, but seem reasonable)

3) No release fee 

4) PM hold security deposit in trust and keeps any earned interest. (No required to be returned to tenant in my state, reasonable charge).

5) Pet Deposit/Pet Rent:  PM will charge a refundable $500 pet deposit and an additional $25.00/month per pet.  The kicker is that the PM keeps the additional pet rent to compensate for additional screening and/or property visits. 

The last charge is the only thing that stands out to me.  Is this typically?  As the property owner, I am fine with allowing pets.  However, I'm not sure there is any additional work for the PM once there is a pet in place. 

For those who use a PM, do these seem reasonable?  All maintenance is done in house, supposedly at a lower rate then would be available through a private company.  I guess time will tell regarding that aspect.

Thanks for the input!

[Account Closed]

A tenant placement fee varies from city to city.  The typical placement fee in San Antonio is 50% of one month's rent. The typical placement fee in Houston is 100% of one month's rent.

Management fees can vary greatly depending on service location, type and size of property.

The majority of companies in Texas have a release fee so not to have one is great.

The p.m. holding the security deposit and trust account and keeping any earned interest is standard in Texas.

Number 5) additional $25 per month is usually additional rent and not a fee.

If it is pet rent, then it would go to the property owner.   If it is a pet fee, it would most likely go to the P.M.  You should verify with your p.m. how they handle the $25.

Most leases I have seen usually calls this additional rent.

Our lease agreement says:

(2) The monthly rent in the lease is increased to $__________