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Updated about 11 years ago on . Most recent reply

Account Closed
  • Fishers, IN
1
Votes |
19
Posts

Including property managers first month take in analysis

Account Closed
  • Fishers, IN
Posted

I'm learning that it's typical for property management companies to keep the first month's rent as a fee after placing a new tenant in the property. Yet it doesn't seem like I ever see that figured in the breakdown of the projected cash flow. There is always the 8% or so figured in for vacancy, and about 10% for management, so wouldn't each vacancy also have a fee of one month of rent along with it? And I'm referring to the projected numbers that a turnkey company or wholesaler would provide, for example. If you had a new tenant every year, that would be one month of rent plus whatever vacancy time you had which would be a significant impact on the cash flow. Am I missing this somewhere or does everyone just know to add this in when doing their own due diligence? Or, is it so dependent on the management company that it's not included by default?

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