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 ???

[Kim Meredith Hampton]

@Dan O'Neill Both the management fee and leasing fee would be collected in the first month of move in, regardless of what day they moved in, your manager still must "manage" the property. That's crazy to say 'double dipping"!!! The leasing fee is for their efforts in obtaining a renter for you. Please remember, most PM's also pay out referral fees if another agent brought them to the table to rent, that fee is never passed along to the owner. PM is a low margin business in contrast to the fees that they must pay out of pocket to operate; insurance, staff, payroll, rent, computers, dues, professional fees/education, bank fees, MLS, advertising, and the list goes on and on..... and someone only wants to pay us dollars a day for doing all we do!!!!!!

That's my soap box today!!

If people want to ***** and complain that it's too expensive, do it yourself! I bet you wouldn't be happy if your boss only paid you that much for all you do