"Total Costs" of PM fees

2 Replies

I've been researching PM fees in all the different markets I'm looking in. The general PM fee is 10%, which I factor into my monthly fees. However, its apparent that all PM companies also charge a tenant placement fee and lease renewal fee (at minimum). There's also other fees which can be bill-paying fees, inspection fees, after-hour fees, portal setup fees, etc. I've found on average, this bumps your monthly PM fee an extra 5%. How does this affect who you want to use for a PM? Cheapest is not best, but definitely looking for value.

I would first make sure who ever you choose matches your goals. The cost in my mind is minimal or negligent of the company you choose gets you into a lawsuit or over charges on maintenance costs or does not help guide you on the right or wrong purchase based on your ultimate goal. They can be the key to your success or your failure as they should be part of your team not just ringing the cash register for themselves 

@Alex Corral For what it’s worth, it’s market-by-market as to what’s normal. I don’t have a leasing/releasing fee but there is a small inspection fee. But when the “inspect” they are really also replacing the air filters, smoke alarm batteries, etc. So I guess I could pay a “preventative maintenance” fee but it’s just as easy to call it an “inspection fee”.

That said, I pay 10% of gross rents. 20 miles south the prevailing fee is 12% and 50 miles east the prevailing fee is 8%.

But really, those fees tell part of the story. Do they have a handyman that can change locks at turnover for $35 or do they call a locksmith for $99? Neither option is “unethical” or “wrong” but they sure have an impact. If you retile a floor you’ll probably buy a couple of extra boxes of tile in case there are cracks. Will the PM store them for you? That matters a lot for an out-of-state investor like me.

Anyway, base fees tell about 1/2 the story...

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