What do you think of this management fee structure?

[Dan Cumberland]

Hi everyone!

I'm shopping around for a property manager for my first managed property.  I really like everything about this company except the fee structure.  I'd like your input:

They charge 9.9%.  Thier leasing fee is 75% of one month’s rent.  The renewal fee is $149.  They keep 50% of late fees.

I'm buying a duplex that will rent for $400 and $700.

I'm fine with the 9.9%.   The late fees are fine too.  It's the leasing fee and renewal that seem high in proportion to my rents.

Any thoughts?

Thanks in advance!

[Nathan Gesner]

@Dan Cumberland we can all give opinions but only one thing matters: what does your market dictate?

I charge 20% of a month's rent for a new lease. That may sound low for most markets but it's expensive for my market. In fact, I am the only Property Manager that charges a leasing fee in my area!

You need to look around your market and get an idea of what other managers are charging. Then...and this is important...you need to see what services they are providing to justify that expense. You want to know if your Property Manager is a pro or an amateur? Ask them to tell you why they charge a 75% leasing fee. If they can justify it, the answer will roll off their tongue with no effort while looking you in the eye.