Monthly Management FeeEveryone is prepared for this fee. It can have a wide range, from six percent per month to 12 percent per month, based on the gross monthly rent. The services that go along with this fee are tenant relations, vendor relations, and all of the things that happen during the month. It includes interfacing with owners, tenants, and vendors, including financial transactions.
Leasing FeeThe leasing fee is a periodic fee and it’s usually a percentage of one month’s gross rental income. It’s charged when a new tenant is acquired. This compensates the management company for the costs associated with acquiring renters, prospecting the tenant, doing the screening, executing the lease, collecting the deposit and the rent, and moving the tenant in with an inspection.
Lease Renewal FeeSome companies charge a renewal fee on a fixed basis or they can do something on a percentage basis, and the cost is significantly less than the leasing fee. This covers the time that’s necessary to spend with a tenant to talk about rent increases. You don’t want to tell the tenant rent is going up; you want to engage with the tenant and talk about the new rent or the changes that might be happening in the lease. This is building the tenant relationship and providing value to your tenant.
Maintenance Overhead FeeThis could be a surcharge or an extra charge that shows up on your maintenance invoices. It compensates the management company for performing the maintenance function. They might send out their own maintenance person or find the right vendor and send that person out to do the work.
Additional FeesOther fees could include eviction fees, which are fixed. There might be a court appearance fee and a separate attorney’s fee. You might come across video inspection fees or a mid-lease inspection fee, which I call a lease compliance fee. This is an important part of property management.
It’s not a lot of money, and it provides a lot of value. You’re tracking what’s happening with the property and you’re also looking for whether the tenant is smoking in the unit or if there’s a pet when there wasn’t one, or if there’s suddenly a business running when there wasn’t previously.
These are some of the fees you can encounter with your property management company. If you have any questions about property management fees, please contact us at ES Property Management.