Property Manager Fees in Student Housing Market
Hello all. This is my first question posting on Bigger Pockets, and is a topic I've been wondering about for awhile now.
I bought a duplex while 20 years old in college, and am still holding it 7 years later. I lived in the house for 2 years, and since then I have been renting it and managing it on my own, until this year when I decided I really would prefer to be arm's length away from the action and would rather hire a property manager full time.
My house is near a university, and typically the house leases to college students. Due to this, there tends to be higher-than-normal turnover (once a year or every 2-3 years).
My concerns are related to the fees payable to the manager and making sure I'm keeping as much of my money as possible. I paid the company 1-month's rent to lease the place out to new tenants, plus 10% per month to manage. First of all, is 1-month's rent pretty typical in the industry? I've asked around and it seems to be somewhat consistent. What about lease renewals? Should I expect to pay 1-month rent every time a lease is renewed, or is this typically a lesser one-time charge?
As a follow-up, if the lease renewal charge is indeed expected to be less, how do you keep the manager incentivized to have the tenants renew, since the manager would earn much less if they stayed, versus if they left and they then were able to sign someone new for the full one-month's rent?
Finally, in a high-turnover neighborhood like mine, has anyone found that a property management company will work with you to lower their leasing fee with this in mind? It's one thing for a management company to charge 1-month's rent to find a tenant that lives there for 10 years, but it's quite another to get charged 1-month's rent every single year for 10 years. Quite a difference in cash flow.
Sorry for the long post. Any thoughts would be extremely helpful. Thank you!