Property Management Fees

[Adam Sieg]

Currently looking to hire a property management company but want to make sure that I'm not paying too much.  I've looked at 2 thusfar with both charging a monthly fee (when there are tenants) but they also charge a "leasing fee" which is equivalent to the estimated rent.  I've seen loose quotes on the internet that you can expect to pay 8-12% for these services.  Based on a monthly rental income of $2000, this would give a leasing fee of $2000 + 125/month = which comes out to nearly 15% of the total rent which to me seems high.  Wanted to see if the group had any thoughts or if I should dig deeper into their coverage to see if it is warranted and if there is significant benefit to these companies. 

[Account Closed]

PMs will nickel and dime you to death.  Look at the contract and all of the possible fees they can charge you, and expect to be charged every single one.  Don't ever believe the story that it's just a standard contract.

So, when you see that they can use their own maintenance workers and can charge you up to $250 without notifying you, expect that to happen until your reserve funds are gone - hello!

Expect them to find you bad tenants, if they profit from problems caused by bad tenants in any way possible.

Expect them to charge you to even fire them, if you get tired of any of the above.

The problem with PM contracts, is that the standard deal puts them into a position to only make money if they conspire to rip you off.  Think about it.  Would you work that hard for someone for only 10% of the rent?  Really, it doesn't take a rocket scientist to figure out that it's just too good to be true, and you know the old saying about if it's too good to be true...I hope.

Think about it.  Would you start any other business, and then expect complete strangers to run it for way less than minimum wage?  

It should all really be against the law, but, I guess the law expects people to be smarter than to expect better.