$100 vacancy fee

Oklahoma City, Oklahoma
Managing Your Property
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$100 vacancy fee

Anthony TaylorPro Member
Member since 2022 · 48 posts · 10 votes

Aloha!!! Hello everyone it's me again! This time I have a question regarding a monthly $100 vacancy fee. It seems counterintuitive to me. If the property managers job is to keep the unit occupied why should the owner be penalized $100 a month. I would better understand it if it was the other way around? Maybe I just need a little enlightening?

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Adam BartomeoBusiness Member
Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
1y

@Greg Kasmer @Anthony Taylor  The reason that Property Managers have this fee is because they normally allow their owners to have too much control over the process. For example, the owner decides the pricing or the owner can refuse applications. In these times the $100 penalty is to incentivize the owner to make better decisions - lower price and/or loosen rigid standards. Also, property managers rely on steady income of rents. When the property's are vacant they need another source of income. Personally, we control the decision making and do not utilize this fee.

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  • Greg Kasmer
    Rental Property Investor · Philadelphia, PA · Member since 2021 · 780 posts · 504 votes
    1y

    Anthony - Not sure myself... My PM company does not charge a vacancy fee. Perhaps in a situation in which you were responsible for re-leasing they could state the case that your efforts (or lackthereof) caused a loss of income for them, but in this case, I think you're correct. I would inquire with them on this expense...

    1Reply
  • Brian TeeterBusiness Member
    Little Rock, AR · Member since 2021 · 75 posts · 64 votes
    1y

    Anthony,

    That seems highly unusual. You might check to see if thats customary/industry standard in your area, among PM companies. I am in Little Rock, Arkansas. We dont charge for that, nor do any other local PMs that I am aware of.  I agree with you that that should be pat of your PM's standard job description and included in your monthly fee.  

    501-951-7100
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  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    1y

    @Greg Kasmer @Anthony Taylor  The reason that Property Managers have this fee is because they normally allow their owners to have too much control over the process. For example, the owner decides the pricing or the owner can refuse applications. In these times the $100 penalty is to incentivize the owner to make better decisions - lower price and/or loosen rigid standards. Also, property managers rely on steady income of rents. When the property's are vacant they need another source of income. Personally, we control the decision making and do not utilize this fee.

    [email protected]239-339-3969
    Bartomeo Property Management4.7150 Reviews
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  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    1y

    Yes that seems like a no go... Unless they are sending a cleaner or something each month to tighten up the place and make sure it is looking good for the showings. Are they also getting a lease out fee too (a commission to get someone into the place)? 

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  • Anthony TaylorPro Member
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    Member since 2022 · 48 posts · 10 votes
    1y

    No there isn't an additional leasing fee. I told her I wasn't comfortable with that. She said it was for staff people who would have to go by and check on a house from time to time essentially for gas. And I basically said I would give you $100 for 2 months but after that I'm not paying you $100 a month and then she said we can discontinue that at any point that you want. Mind you we have just started doing business together.

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  • Anthony TaylorPro Member
    OP
    Member since 2022 · 48 posts · 10 votes
    1y

    Aloha! Thank you guys and gals for your wisdom, insight and time. You have blessed us! Mahalo 

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  • Chase Busick
    Realtor · Oklahoma City · Member since 2020 · 258 posts · 139 votes
    1y

    @Anthony Taylor Did you end up disputing this or settling on it with your PM?

    I like @Adam Bartomeo's answer because it gives some decent insight & context behind why it might be applied. It is still strange that they'd apply this fee when they'll probably still charge a decent amount for leasing. I get that they probably don't want to do more work than absolutely necessary & this is why they may charge when they have passed along applicants for you to approve.

    I haven't seen this fee utilized myself, but is interesting to hear about.

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  • Anthony TaylorPro Member
    OP
    Member since 2022 · 48 posts · 10 votes
    1y

    @Adam Bartomeo that makes sense, and I appreciate that insightful information! We decided to go with it for a couple months to see how things go since we are just getting started! 

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  • Anthony TaylorPro Member
    OP
    Member since 2022 · 48 posts · 10 votes
    1y

    @Chase Busick We decided to go ahead and give it a try since we already have begun with them and I agreed just to do 2 months and then after that I will not be paying $100 monthly fee. We need to get the unit rented out we need money coming in. But I do understand that explanation for it but I'm definitely not a fan of it going forward. We will definitely work with getting the house leased and we won't be a problem as far as the amount of monthly income we expect so no incentive needed on our end. But If things don't work out would love to have other options ready to go! Thanks for your interaction!

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  • Anthony TaylorPro Member
    OP
    Member since 2022 · 48 posts · 10 votes
    1y

    I appreciate all the insight comments and wisdom!! I have to say sadly that we released the property manager from services for us. It just wasn't getting off well at all. We have since plugged in with a more reputable company and it is already a night and day difference!!! She was gracious and understood. 

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  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    1y

    @Anthony Taylor by chance was the $100/month being charged by a flat-fee PMC?

    All of the flat-fee providers (as opposed to % of collected rent) in Metro Detroit charge their flat fees
    1) Whether property vacant or occupied

    2) Tenant paying or not

    Logical Property Management4.9460 Reviews
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  • Anthony TaylorPro Member
    OP
    Member since 2022 · 48 posts · 10 votes
    1y

    Thank you!!

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    1y

    I've never heard of it.  Adam's description of how a PM works is quite different from what I've experienced (and he runs a PM so has more experience than I do).  My PM tells me what they think the rent should be and we can discuss it, but if the place is vacant, they don't get paid.  They do get paid a higher fee when there is a vacancy to find a new tenant and if they wanted to charge a $100 vacancy fee to the owner, then they should hide it in that fee.  

    My PM charges a flat rate to find new tenants which I like (vs a month's rent)-on the less expensive properties, they don't get short changed and on the more expensive properties, the owners don't get overcharged.

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