Property Management- Renewal and New Lease Commission inquiry
Member since 2020 · 6 posts · 1 vote
Property Management- Renewal and New Lease Commission inquiry
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Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
7mo@Adam Bartomeo the lease is 30+ pages. We were talking about renewals not leases but thanks for asking. This is simply a 1 page option email with different lengths and rates along with any lease changes which are pretty rare.
As far as setting the rates I ask my PM for market rent and how long it would take to find someone at that rate. Then I determine how much I want to offer the renewal at. This is based on how good a tenant they've been and for how long. (Most of my tenants have been with me 5-10 years.). If they haven't been able to keep the property up to the HOA's standards, complain about small issues or pay late, they pay over market. If I don't hear from them for a year or more they pay market rent. If I'd like to sell I charge over market so they decide to move or I get paid more money to change my plans.
I will tell you I did learn that my initial plan 20 years ago to offer discounts for multiple year leases was backwards. Most tenants love an extra year at a 50% higher increase over a single year. ($150/mo more for 2 years instead of $100/mo more for one year.). This gives them stability and gives me this year’s and next year’s $100/mo increases without having to ask twice.
Ps. I don’t think you heard me complain about my PM. In 25 years I’ve had MAYBE one vacancy that lasted a month, 90% are around 2 weeks. I’ve started 2 evictions but even they were out by the end of the month and their security deposit covered the missing rent. They also created very short vacancies. I don’t think you’re concentrating on what I consider BY FAR the hardest part of a PM’s job, attracting and screening the tenant. This is THE reason I use my PM for all but one of my properties. Keeping me legal, having go to vendors and putting a professional face on my operation are bonuses. But I’ve never complained about the 10’s of thousands I pay them every year for their primary service. To me It’s money well spent.
Pps. If you’ve read very many of my posts you will notice how many times I’ve told people with problems they NEED to hire a PM today. My post wasn’t anti-PM I was simply saying I thought finding a tenants was much more than twice as valuable as renewing a lease but the charge was only double.
8 Replies
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes7mo
My PM pays a $300 commission to the person that brings the tenant for a new lease. Which seems like a steal to me. OTH they charge me $150 for a renewal which seems like highway robbery for emailing/texting a 1 page renewal form.
- Member since 2020 · 6 posts · 1 vote7mo
Quote from @Bill B.:
My PM pays a $300 commission to the person that brings the tenant for a new lease. Which seems like a steal to me. OTH they charge me $150 for a renewal which seems like highway robbery for emailing/texting a 1 page renewal form.
I appreciate the feed back on this. I think we are at $250 per renewal(Split between leasing and maintenance staff), and THAT seems high. Id love to see $150 but finding that even $150 would be high compared to some other groups. . I agree somewhat with your logic that they are just sending out a renewal notice, however someone is most likely to renew if their overall experience in the unit was favorable due to attentive office/leasing staff, effective and efficient site and unit maintenance. We feel the renewal is a culmination of the efforts over the entire term of their lease.
- Real Estate Agent · Memphis · Member since 2026 · 570 posts · 335 votes7mo
On larger multifamily (200+ units), commission structures usually aim to balance motivation with retention and expense control.
For new leases, common ranges are:
- Flat fee per move-in (often $100–$300 per lease depending on rent tier and market)
- Or a percentage of first month’s rent (often 25–50%)
- Some properties tier it — higher bonuses during slow season or for hard-to-lease floor plans
For renewals, it’s typically lower since there’s no marketing cost:
- $50–$150 flat per renewal is common
- Some operators pay a small % of rent increase instead
- Others tie renewal bonuses to overall property retention targets rather than per-unit payouts
As for splits, many properties:
- Pay new lease commissions primarily to leasing staff
- Pay smaller renewal bonuses split between leasing + on-site manager
- In some cases, include maintenance in a quarterly occupancy or retention bonus pool instead of per-lease commissions
A growing trend is shifting from per-lease payouts to occupancy and retention performance bonuses, which reduces churn incentives and aligns the team with long-term stability rather than just volume.
The bigger question isn’t just what you’re paying — it’s whether the structure rewards behavior you actually want: strong screening, high retention, and controlled turnover.
- 7moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Jeremy Hanks:
Hi all! We own an operate a fair chunk of larger properties (200 unit+). I am concerned about the $ that is being paid to site teams for commissions for both new leases and for renewals. Is anyone willing to share a bit about the structures you or your management companies have in place to pay leasing and renewal commissions?
How much do you pay in commissions for a renewal? Does that get split among office/maintenance teams?
How much do you pay for a new lease?
You and @Bill B. seem to have a vary narrow understanding of proper Renewal Process Goals.
Yes, in your narrow view paying "anything" seems like a lot to just send a 1-page renewal offer to a tenant.
Why do I keep saying, "narrow"?
Because there is so much more you haven't thought to consider - which is a common issue in this business 😣
What are some of these concerns?
1) Rental Market Analysis: just using Zillow is NOT the best way!
We use at least 3 sources and Zillow is only right around 80% of the time and be as much as 10% off.
How comfortable are you with a 20% chance of a 10% error?2) Selling vs Tellng: you think it's guaranteed that a tenant will just accept any/every rent increase sent on that 1-page renewal form? With zero questions and no followup?
That might have happened during the COVID-fueled real estate craze, but does NOT happen in a standard market.
Days On Market (DOM) and vacancy percentages are their highest in 3-4 years!
Go verify this for yourselves.3) 12 Month Stays Kill Profits: no one's mentioned Turnover Rates or Average Tenant Stay?
Very difficult to make a profit with rentals if too many of your tenants only stay 12 months!So, a softer, more sales oriented approach is needed in most markets to get tenants to renew & stay - protecting owner cashflow.
We start our renewal process 90 days before a lease is up.
Our primary focus is getting tenants to stay, with a reasonable increase, if market rents are rising, because the averge turn costs an owner about 2 months of rent via vacancy and repair costs.We could do it your way and just give tenants "take it or leave it" renewal offers.
Of course then you'd be posting how your PMC is incompetent at renewals, can't fill your vacancies and killed your cashflow😫@Jim Johnson is 100% correct that the best renewal strategy rewards the results you want🤩
Logical Property Management4.9459 Reviews- Member since 2020 · 6 posts · 1 vote7mo
@Drew Sygit, I appreciate your thoughtful response, but do feel that you may have misread or mischaracterized my comments. I do fully understand and agree that there is MUCH more to renewals than just sending a renewal offer and hoping they just accept it.
You have some great insight here. Curious your thoughts on how your company does commissions for renewals and new leases.
- 7moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Jeremy Hanks:
@Drew Sygit, I appreciate your thoughtful response, but do feel that you may have misread or mischaracterized my comments. I do fully understand and agree that there is MUCH more to renewals than just sending a renewal offer and hoping they just accept it.
You have some great insight here. Curious your thoughts on how your company does commissions for renewals and new leases.
Apologies if I incorrectly shaded you!
New leases:
Basic Plan - 50% one-month of rent.
Property put on our website, Zillow family and Go Section8Premium Plan - 10% one-month of rent.
Property put on all of the above, total of 37 websites (some manual entry) and MLSRenewals: $200 flat fee
Logical Property Management4.9459 Reviews
- 7moAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
@Jeremy Hanks We charge $60/renewal (we lose money here) and 1/2 months rent for a leasing fee (we lose money some of the time). This is extremely fair.
@Bill B. It sounds like you do not understand what really goes into releasing a tenant because it is way more than emailing a 1-page doc. Also, you may want to get a 2+ page lease...
Bartomeo Property Management4.7150 Reviews - Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes7mo
@Adam Bartomeo the lease is 30+ pages. We were talking about renewals not leases but thanks for asking. This is simply a 1 page option email with different lengths and rates along with any lease changes which are pretty rare.
As far as setting the rates I ask my PM for market rent and how long it would take to find someone at that rate. Then I determine how much I want to offer the renewal at. This is based on how good a tenant they've been and for how long. (Most of my tenants have been with me 5-10 years.). If they haven't been able to keep the property up to the HOA's standards, complain about small issues or pay late, they pay over market. If I don't hear from them for a year or more they pay market rent. If I'd like to sell I charge over market so they decide to move or I get paid more money to change my plans.
I will tell you I did learn that my initial plan 20 years ago to offer discounts for multiple year leases was backwards. Most tenants love an extra year at a 50% higher increase over a single year. ($150/mo more for 2 years instead of $100/mo more for one year.). This gives them stability and gives me this year’s and next year’s $100/mo increases without having to ask twice.
Ps. I don’t think you heard me complain about my PM. In 25 years I’ve had MAYBE one vacancy that lasted a month, 90% are around 2 weeks. I’ve started 2 evictions but even they were out by the end of the month and their security deposit covered the missing rent. They also created very short vacancies. I don’t think you’re concentrating on what I consider BY FAR the hardest part of a PM’s job, attracting and screening the tenant. This is THE reason I use my PM for all but one of my properties. Keeping me legal, having go to vendors and putting a professional face on my operation are bonuses. But I’ve never complained about the 10’s of thousands I pay them every year for their primary service. To me It’s money well spent.
Pps. If you’ve read very many of my posts you will notice how many times I’ve told people with problems they NEED to hire a PM today. My post wasn’t anti-PM I was simply saying I thought finding a tenants was much more than twice as valuable as renewing a lease but the charge was only double.
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