Starting out - Property Management Costs

[William Stubbs]

I have a property that I previously occupied in NC that I have decided to rent out.  I currently live out of state.  I have received a quote from a property management company, and I'm not sure if the terms are typical for this type of deal.  I would appreciate any information that you guys would be willing to share from your experience.

Details:

Property Value ~ 130k SF home 3BRx2.5Bath

Potential Rental Range - $1050- $995/mo ($995 seems more realistic)

Term: Contract has a term of 1 year of management, with autorenews for a year.  

Fee: 8% total gross rental income. 50% first months rent each time tenant is procured and $375 on renewal.

Maintenance fee: 10% of repair cost on all maintenance coordinated & 20% on all renovation costs coordinated.

NSF/Late Fees: Split equally

Interest on Deposits: To property management company

I don't want to pinch pennies on this, but I certainly don't want to overpay when it may not necessarily assure me better service.  

1.) My primary concern is the term.  Auto-renewal will not be in the contract. I don't sign service contracts that include them, because I feel good quality work doesn't require one.  Is it typical to include a performance clause, ie: If not rented for x months or something to that effect contract is void?

2.) Are the costs typical?  With the tenant acquisition fees, it comes out to about 12% for new tenants and 11% for renewals?  

3.) I'm not sure what else I'm missing.  Any suggestions?

Thanks so much in advance!

[Andrew Syrios]

The 8% fee and 1/2 first month's rent is normal. Usually it's 10% and sometimes it's the full month rent. I haven't seen the $375 for renewals or the 10% and 20% fees for maintenance and turnover. Unless they're doing substantial rehabs, in my judgement, that should come with the standard management fee. And splitting the late fee seems ridiculous to me. I would keep looking.