Property managers keep late fees & security deposits?

[Jonathan H.]

We are investing in the greater Seattle area and have been interviewing property managers. I've been surprised that many managers say they will collect AND retain all late fees, pet fees, as well as 50-100% of any retained security deposits! All of this on top of charging 8-10% of monthly rent and up to 1 month's rent when a lease is signed.

Are these aggressive fee structures the norm for property managers in your area? Do you have suggestions for what items to negotiate and what is reasonable?

Thanks.