Updated about 5 years ago on . Most recent reply
Property Management Renewal of Lease Fee
The property management company I work with in Michigan wants to charge me $250 for a renewal of a lease. I have two other PMs in another State and they don't even charge me for this. Is this common? It's just resigning a tenant already in there. What am I missing?
Likewise, what would you define as penny pinching by a property manager? What do you expect in terms of fees?
I appreciate all responses.
FYI.... I live abroad so I cannot manage it on my own.
Most Popular Reply
If that PM can justify it with their process, there is nothing wrong with it. I know many PMs who don't charge this fee and also don't have a good renewal process. Or if they do renew, they send a 1 page letter without evaluating for market rent increase, reflecting on the tenant's payment history or unit condition, etc. If they're in the same market as a PM that charges $250 but actually puts work into every single renewal, who is to say that this is "penny pinching"?
A PM needs to make a profit to survive. Every single PM you are working with should be a profitable company; if they're not profitable, you will have the worst client experience. How a PM structures their fees will always vary from company to company, even within one market. Also, keep in mind that within a market there are many submarkets and a great PM will usually specialize in one or a few and not be a jack of all trades. So what processes (and fees) work great for C/D class rentals won't work well for A/B class, and what works for managers dealing with SFRs also won't work well for managers who specialize in mid-size apartment complexes.
Instead, vet the PM on their processes and procedures. They should be able to explain what work goes into earning each and every fee they plan to charge you. Vet their portfolio. Is it similar to what you own?
At the end of the day, any price is fair if you are willing to pay it and it provides you value.