Property management increase fees to 1.5x month rent

[Waleep Alvi]

Prior to this I was paying 8% and 1 months rent. Here are new terms:

-9% per month

-1 month rent when leased for 0-12 months

-1.5 month rent when leased for 18-24 months.

I never seen the 1.5 month rent for 18-24 months with my other PMs. Does anyone else have this and is it something I should negotiate on?

[Nathan Gesner]

Quote from @Waleep Alvi:

Prior to this I was paying 8% and 1 months rent. Here are new terms:

-9% per month

-1 month rent when leased for 0-12 months

-1.5 month rent when leased for 18-24 months.

I never seen the 1.5 month rent for 18-24 months with my other PMs. Does anyone else have this and is it something I should negotiate on?

A lot of people hire property managers that charge low fees, but property managers can barely make a decent living on 8% of the rent. I'm not surprised to se them increase it and wouldn't be surprised if they eventually get to 10%.

One month for a year-long lease is pretty common. I've never heard of 1.5x for 18-24 months. It doesn't even make sense. First, the only way you get a discount is if the tenant signs up for a two-year lease. But how does that benefit you? It actually benefits the Property Manager because less turnover means less work, which means they should be charging you less, not more! I would also caution you against this practice. In my experience with 400 rentals, a majority of tenants will terminate early on leases longer than one year. You could pay 1.5x for a two-year lease, but what happens if the tenant leaves after 14 months? Do you get a new tenant without paying another fee? Probably not. It's all to the benefit of the PM.

I would ask the PM to justify the cost. I would also ask them to justify their use of 18-24 month leases and how they will handle early terminations and charging you again for another lease. Lots to think about.