Property Managemen agreement question

[B H.]

A quick question on my management agreement from Property Management company.

I spoke with the owner of the company and feel pretty comfortable working with them. I just wanted to run by some of the specifics of the contract with someone who has more experience. This will be my first time working with a management company.

8% of total rents per month
1/2 first months rent to find tenants
Will contact me if repairs needed are over 200 dollars.
The one question I have is: that they included a clause that when the lease is renewed there is a 250 dollar fee, even if the same tenant remains.
Is that normal?
And anything additional I should look out for in the management agreement?

[Dan W]

The 8% of total rent and 1/2 first month rent sounds about right. I use a PM and I don't have any type of clause in there about a renewal fee. I would strike that.

You might want to add language about how long the tenant must stay in order for the PM to get the 1/2 month rent. You don't want a situation where the PM has an incentive to put a lousy tenant in there who doesn't stay more than 3 months and you have to pay the 1/2 month rent again for the next tenant.

How often will the PM inspect the inside of the property? Will they charge you for that?

I assume the PM is collecting the rent from the tenant. Is there any wording about when the PM will pay you?