Does 1st months rent for lease up include...

Question

It was always my assumption that 1st months rent for lease up was just that 1st months rent. Recently I was charged 1st months rent plus the 10% management fee. So the actual cost was 1st month +10%. Curious if this is industry standard or something that will be market by market. My previous PM only charged 1st months rent in same market. The other possibility is the PM software auto deducted the 10% and PM may reimburse.

Thank you for the feedback.

Scott M. · Answer

Interesting and I like your approach.  You seem chill about it and open to a discussion and that is the right mindset.  I have been to several PM conferences and talked with many managers and frankly I have not heard of anyone doing this.  Doesn't mean it isn't common I have just not heard of it.  But talk to them and see what they say.

I take it this is not addressed in  your management agreement?

Ashley Herring · Answer

Hi Noel,

What we used to do is charge 1 one month leasing fee + 10% management fee, however the management fee was never charged the same month that the leasing fee was charged. Example - Leasing fee gets charged to your statement for June, therefore 10% management fee was NOT charged. On July's statement, 10% management fee resumes. I would review your management agreement to see how it's written. (We are located in Central Florida.) I hope I understood your question and hope I was able to help.

Ashley