Are Property Management Contract Fees Negotiable?

[Lou Ruggieri]

Hopefully this post is in the right sub-forum: So I'm in the process of closing a deal on my first out of state property and I found a property manager that I like very much. I'm just looking over the contract agreement and wanted to know if any of the fees they are charging are negotiable? It feels like a fine line bc obviously I want good management and don't want the manager to feel like I'm being cheap and then consequently giving me poorer service bc he's getting less. But at the same time I also don't want to get charged for some things that I don't agree with. For example, there is a fees that include: 10% of gross rent 50% of all pet fees. $450 for each new tenant placement. $195 for each tenant renewal Is the 10% negotiable? Why the pet fee share? And more so why does it make sense to get more for finding a new tenant than keeping an existing one? I guess there's more work involved, yes but, doesn't that also invite the possibility of putting in bad tenants SPECIFICALLY for the purpose of turnover thereby allowing them to collect $450 more often? It just seems weird that there is more of an incentive to have a revolving door of tenants for everyone involved. Are any of these things negotiable?

[Account Closed]

This is why I really think landlords should manage their own properties.  Look at the incentives for the PM in this contract.  Your PM will definitely be looking for tenants with lots of pets, for starters.  And, hey, if they need to be evicted - great!  More incentives to get rid of bad tenant, and find a new one!  Fees for everything!  And more fees if they find you a terrible tenant!

PMs make money when there are problems, by and large.  When a reasonable business mind looks at these terms, they at minimum, cringe.  Why on earth would you agree to such terms?  

Who cares if this is standard, if it's standard to be ripped off?  

Use your own brain.  If it doesn't make sense or sounds good to you - say no!  No matter what guru on the internet says it's standard.

There are plenty of nightmare stories even here on BP - including my own and my daughter's - that say you should run away from such a contract - no matter how many supposed investors say otherwise.