Property Management Fees

[Patrick Leitch]

Either as a property manager or someone who uses a company to manage your multi family properties, what fees do you charge or get charged? Any other ways to bring in revenue as the manager? For example, a % is first month lease, renewal fees, admin fees, onboarding fees, etc. I just got a job with a property management company and we handle 2200 units in Tennessee and I am looking to see where I can increase revenue on the properties we already have.

[Bjorn Ahlblad]

@Patrick Leitch we use a PM on some units and manage others ourselves............we pay the PM 10% and 500 dollars for new tenant processing; there may be some other fees as well, I do not have the paperwork at hand. All the best!

[Theo Hicks]

Construction management fees if you help investors manage the renovations for their projects

[John Casmon]

Really hate the fees on fees approach for PMs. A better way to bring in revenue is to focus on helping the owner bring in revenue. Do you get a portion of all revenue or just rental income? If just rental income, adjust that so your interest are aligned and you can focus on increasing the NOI.

[Percy N.]

For larger Multi-family assets (100+ units), the fees are typically in the 3% - 4% range, plus payroll (leasing agent, prop mgr, maintenance, etc based on needs of the property).

As @Theo Hicks mentioned, there are add-ons like a construction mgt fee.

We also sometimes see an employee discount for those who live on the property.

One way to increase the PM revenue is to put in a bonus structure where if you help the owner achieve X, you get a bonus. This helps both parties.

[Theo Hicks]

@Percy N. Great add. Leasing agents can receive bonuses for individual leases, as well as for an overall occupancy goal. 

A good idea would be to create a proactive marketing plan for your clients with what you will do, the occupancy target, and the bonus to the property management company if the target is hit. Make sure you add in how much additional revenue the property would generate if you achieve the occupancy goal so that they have something to compare the bonus to.