Property Managment - Tenant Placement Fee?

Question

Curious, is it common for a property management company to charge a fee that’s  100% of first month’s rent upon place a new guaranteed tenant? If so, is this negotiable? Thanks

Drew Sygit · Answer

Depends on the local market and what a PMC's overall fee structure is. In Metro Detroit area, one month is the standard.

Ethan Jacobsen · Answer

Yeah, it depends on where you are. Tenant placement fees are a little odd in my opinion since it isn't always aligned with the owners goals. As an owner, you want to minimize vacancy, but as a property manager that charges a tenant placement fee, you would be incentivized to get a new tenant placed every year with that kind of fee in place. We don't charge a fee at all for tenant placement - everything is covered under the standard management fee. However, some of our competitors charge $250-$400 as a tenant placement fee. So like @Drew Sygit said, it really depends on the area.

Dick Rosen · Answer

Lease Up Fees or Placement Fees are very common and vary depending on the market. Said fee is not always a profit center for PM's because the fee is what covers admin cost, the expense of showings, marketing costs and in some cases PM's will pay a portion of that to another Realtor who brings the tenant.

Zachary Ray · Answer

Property management placements fees are typically 50% to 100% of the first month's rent. That is just what the company has in it's contract. If those fees are higher than check the contract to see if they make money off of maintenance mark ups, lease renewals, inspections etc and weigh your options. Please keep in mind property management is a business just like anything else. Don't always go with the cheapest company.

Bjorn Ahlblad · Answer

The PM I had also charged for showing-or non showing; and they offered to show to anyone with a pulse!

Property Managment - Tenant Placement Fee?

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