Property Management Fee Structure Question

[Dan O'Neill]

Hello Everyone,

What is the standard practice for applying (or not) both of the following in the first month of a new tenant placement: 1) the monthly property management fee; and 2) the leasing fee (1/2 of the monthly rate)?

For simplicity's sake we'll say:

- $1000/monthly rental rate

- 10% PM Fee to rents collected

- 1/2 Monthly Rental Rate for placing new tenant

- Move in date 1st day of the month

Which of the below fee calculations is the general practice in PM industry?

Scenario A - both fees collected (double dip)

$500 Leasing Fee + $100 PM Fee = $600 PM fees 1st Month

Scenario B - both fees collected (but prorated PM Fee)

$500 Leasing Fee + (10% of the remaining rent not applied to Leasing fee - or $50) = $550 total PM Fees 1st Month

Scenario C - only the leasing fee applied 1st month

$500 Leasing + $0 PM Fee = $500

Scenario D ???