Re-Lease Fee to Property Managers

[James Paine]

I own rental properties in 5 different states and everyone does things differently.  In most of the ares I have more than 5 rentals so I am usually able to negotiate a good deal.  

My question is about a re-lease fee....

What is a release fee:  When your current tenants lease runs out, you pay the property manager a fee to have them sign a new lease.  (LITTLE TO NO WORK, IN MY OPINION.)

My thoughts against it:  It is almost no work.  Like you send a easy 1 page doc-u-sign to them.  Done.  My managers in IL and PA are charging 1/2 months rent for this. 

My thoughts for it:  Mostly I don't trust that people won't act in their own self-interest and if I negotiate it the re-lease fee out of the deal I think they will try to get tenants to move out after their lease so they can make a full lease up fee.  This will cost me way more in the long run. 

What do you think? 

[Dawn Brenengen]

@James Paine Clearly, I don't charge enough.  I charge 1/2 of one months rent when I have to turn over a property.  There is no renewal fee if the tenant stays.  Actually, most of my leases simply go month to month after the first term, so there isn't really anything to renew.  If they don't go month to month, it's already built in to the contract that it goes for another year.  If I need to change a term like rent amount, there is a one page amendment I can fill out.

1/2 rent for renewing a tenant seems a bit much.  Are their ongoing fees cheaper than usual, i.e. 6% instead of 8%?