Property Management Tenant Admin Fees

5 Replies

I have a few properties under a management company that charges me, the owner, $65 per door.

They also charge the tenant's a 2.6% admin fee each month, which equates to for example $20 a month on a $750 monthly rental payment. $20 a month, in the example, to process a payment seems high to me.

Is charging tenants an admin fee, which I believe is to cover the costs of accepting and processing their monthly payment, common for property management companies?

Would 2.6% be considered a industry average amount?

@James Conaway , frankly I've not heard of a charge to tenants for processing their payment-- the exception being if they pay by credit card--the service fee that the credit card processor charges should be paid by the tenant.

We charge $35/hour (CAD) and track what we do at properties and bill quarterly. I'd say high maintenance properties will run require probably 3-5 hours/month. Easy breezy properties I'd give maybe an hour a month!

Best of luck!

I find it funny that the property manager is charging the tenant an admin fee.  Property management should be a cost for the landlord, not the tenant.  Although, if you can successfully pass the fee on to the tenant, more power to you.  I don't think its wrong either to charge a processing fee for an electronic payment, but shouldn't be any more than a $1-$2 per transaction or 3-4% for using a credit card per transaction.

@James Conaway , yes that is wrong!

Landlord Fees:  Can you elaborate more on the fee structure?  Is $65/door the total every month; flat rate?  Or does the PM also charge a monthly management fee?  It would be unusual to see an Admin + Management Fee.  Typically it is only Management Fee and perhaps a 'setup' Admin fee when you first first.

Tenant 2.6%:  What does this entail?  I imagine it is not processing payment if they utilize a management software.  Tenants are charged by the software for that service, not by management company.  If tenant pays by ACH, that's less than $1.50 per transaction.  Could it be taxes?

Combined:  Assuming $65 is a flat rate, this could be PM trying to reduce your expenses but still generate enough income.  $65 per door is cheap!  With that additional $20-25 paid by tenant that significantly bumps their revenue.  Unless it is Tenant Admin + Landlord Admin + Management Fee, that would be excessive.

Have you asked your property manager?  They should be able to clearly explain their fee structure.

@Kenny Dahill  It's a total monthly fee of 4.9% assessed to tenants. 2.3% for city taxes and 2.6% for admin fee, which is assessed to process tenant monthly payments and manage payment of city taxes.

The $65 management fee per door is a flat monthly rate. There are other fees assessed based on turnover, for example lease renewals have a fee ($150), marketing and lease starts have a separate fee. So they make more than the $65 monthly fee through turnover.