Property Management charging too much!?!?

[Bryson Cox]

Hello....

I wanted to get people's opinions on how much is normal for a property management company to charge? Currently the management company for my 13 unit apartment complex is charging 10% of all rent collected as well as the first months rent on a unit that becomes rented out. With this added bonus for them filling a unit, the total management expense comes out close to 13-16% of the total gross rent collected which seems high to me. I also fear that this first months rent bonus for getting a unit rented out takes away incentive for the company to get renters to renew their lease. Thoughts on this??

The company has a good reputation in the area but after analyzing my numbers, I found the units have been occupied less than 70% on average the last few years. I am dealing with a C Class neighborhood but should expect closer to 80% occupied at the very least, am I right? Average vacancy rates in the area have been from 16-10% but my property has roughly 30%+ vacancy rate. From everything I've researched this is not good enough. How do I hold my property management company standard, especially when I feel they are charging me so much?

Should I approach them about performing better? Or try to negotiate a lower property management fee? 

Any tips or advice would be greatly appreciated. 

[Jim Shonts]

@Bryson Cox C class apartments take a lot of property managing. The 10% may be high if it was a A class as the property is probably in better shape and there is less overall work and the tenants are often easy to work with. These C class buildings seem to need more repairs, the tenant is more difficult to work with, they are less tech savvy and have a more difficult time paying rent each month on time. All of that spells more time a manager needs to dedicate to managing. All the extra time and the low rents mean they have to charge a bit higher rate. I dont charge 10% personally, but I also dont take on those C class units. As for the leasing fee, it may be fair for the amount of time it takes to rent out. My lower end properties have way more showings and more calls about people asking if we take 400- credit scores or if we take section 8. I do more showings where people just dont show up or call. Instead of charging more, I just decided to not manage those units anymore and stay in A and B class. Those fees sound fair to me. Maybe you can work a bonus system with the manager for hitting metrics that you mutually establish. Shift the motivation and compensation to something that you want to be rewarded.