Need help reviewing my first Property Management Agreement.

[Billy Bell]

Hi All!

So I'm coming up on my closing date for my first ever rental property, and currently looking for property managers. I was referred to this one by a trusted friend that has a couple dozen units in the area. 

I have no idea what terms to expect in a Property Management agreement, what is fair, what should be included and what costs to expect in particular situations.

Would love if I could get some help from experienced investors with a quick look over of the 4-page agreement to see if it seems fair.

Here is a link to the blank document:

https://drive.google.com/file/d/0BwE3tEriFaNmby03NDdPQlVlQm1JN0ROU2QydG0xSFBEUVNv/view?usp=sharing

Thank you so much!

[Laura Kayes]

Hi @Billy Bell,

I don't like this agreement at all. I'd go with a company that uses a state management agreement or something very similar. They are a lot longer than this as well. 

Key Red Flags I saw:

1) They keep 100% of late fees. (You should be entitled to all late fees)

2) They rent washers and dryers to tenants and keep the fees. (I've never seen this before, but to me it puts a negative taste in my mouth)

3) A 2 year agreement is way too long. 1 year agreement is pretty standard. 

4) They state they are advertising on Zillow and for $15 in the paper... Do they not advertise on the MLS? That would be extremely concerning if they do not.

5) $550 repair allowance is WAY too high. It should be $250 or so.

6) They up charge repairs with a $79 service fee PER hour.

7) They charge for inspections on the property, $48 4x quarterly, and it seems like this is mandatory and in addition to the 10%

Just from my point of view, they seem to charge for everything, and that is not part of the 10% of rent. In cash flow terms, this may not be the best fit. 

-LK