Is it common for property management companies to charge these fees?
Most Popular Reply
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2yHmm...I have great reviews and my owners are very happy.
Fees are only one part of the picture. You need to know what services they provide in exchange for those fees.
Remember: cheaper doesn't mean you'll make more money.
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.
1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!
The DIY Landlord Book4.7247 Reviews
23 Replies
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Like any service based business, you're going to encounter a variety of types of fee structures. You might find people that charge low rates, high rates, lots of fees, no fees.
I'd focus on competency. One of the things that sucks in real estate in general is the crappy companies usually charge the same as the good companies.
District Invest Group545 Reviews - Thank you, Russell. They all have great reviews. Do you have any tips on finding the best-suited PMC? (Any specific questions I should ask? Or is there anything I should pay attention to during initial calls)?
Quote from @Russell Brazil:
Like any service based business, you're going to encounter a variety of types of fee structures. You might find people that charge low rates, high rates, lots of fees, no fees.
I'd focus on competency. One of the things that sucks in real estate in general is the crappy companies usually charge the same as the good companies.
During my first calls, I ran my current situation through them and sent them the inspection report with pictures, asking for their feedback on the rent and possible repairs. One of the PMCs basically said they couldn't elaborate on that until we signed the agreement. This left a slightly bitter taste in my mouth, but I'm not sure if I approached it in the wrong way.Thanks again!!
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Quote from @Kay Nemen:
Thank you, Russell. They all have great reviews. Do you have any tips on finding the best-suited PMC? (Any specific questions I should ask? Or is there anything I should pay attention to during initial calls)?Quote from @Russell Brazil:
Like any service based business, you're going to encounter a variety of types of fee structures. You might find people that charge low rates, high rates, lots of fees, no fees.
I'd focus on competency. One of the things that sucks in real estate in general is the crappy companies usually charge the same as the good companies.
During my first calls, I ran my current situation through them and sent them the inspection report with pictures, asking for their feedback on the rent and possible repairs. One of the PMCs basically said they couldn't elaborate on that until we signed the agreement. This left a slightly bitter taste in my mouth, but I'm not sure if I approached it in the wrong way.Thanks again!!
Well people in real estate make a living trading their knowledge for money. Too many people out there want that knowledge for free. We give people a taste of information to wet people's appetites, but we don't give away everything for free. Asking someone to review an inspection report, that takes time. I don't think I'd do that for someone for free either.
For screening a PM though, I'd ask people I trust for referrals.
District Invest Group545 Reviews - 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votes
Personally I would not look favorably upon a property management company with great online reviews. If the tenants are so happy they never complain the owners must be miserable and broke.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes2y
Hmm...I have great reviews and my owners are very happy.
Fees are only one part of the picture. You need to know what services they provide in exchange for those fees.
Remember: cheaper doesn't mean you'll make more money.
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.
1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!The DIY Landlord Book4.7247 Reviews - 2yJoe FunariBusiness MemberReal Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
@Kay Nemen I would recommend you reach out to @Kyle Mccaw with McCaw Property Management. https://mccawpropertymanagement.com/ They manage all my rentals in the Dallas/Ft. Worth area for many years. I worked for a PM in high school and college years. So I know what to look for in a good PM. I would recommend you stay away from small independent PM's that manage less than 200 doors. Their maintenance people aren't very good based on my personal experience. Also, franchise PM's there always seem to be a disconnect and long delays in responses to questions or concerns. McCaw is a local company. Kyle is the owner and fellow investor/broker. State of Texas requires PM's to have a real estate license. So the good one's will typically have their brokerage license by now because of their many years of experience. @Russell Brazil is absolutely correct on not focusing on just rates. McCaw does perform annual inspections with full reports with photos on all the rentals the manage. This has been very helpful to me in managing my rentals. Also, you are blind copied in on all work orders tenants submit. So you can stay on top of the PM with regards to maintenance. Not all PM's offer this. Also, each year at renewal of leases McCaw sends current rent comps with recommendations for lease renewal fees. Treat your long term rentals like a business and you will succeed. Any further questions please let me know.
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Kay Nemen you're making typical rookie mistake of ASSUMING that all PMCs provide the same services and EXECUTE those services exactly the same way.
You're solely focusing on costs instead of HOW their PROCESSES will effectively manage your investment.
So, you'll get exactly what you pay for - good or bad.
Logical Property Management4.9455 Reviews Quote from @Nathan Gesner:
Hmm...I have great reviews and my owners are very happy.
Fees are only one part of the picture. You need to know what services they provide in exchange for those fees.
Remember: cheaper doesn't mean you'll make more money.
Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.
1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.
4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!Thank you so much!!
Quote from @Joe Funari:
@Kay Nemen I would recommend you reach out to @Kyle Mccaw with McCaw Property Management. https://mccawpropertymanagement.com/ They manage all my rentals in the Dallas/Ft. Worth area for many years. I worked for a PM in high school and college years. So I know what to look for in a good PM. I would recommend you stay away from small independent PM's that manage less than 200 doors. Their maintenance people aren't very good based on my personal experience. Also, franchise PM's there always seem to be a disconnect and long delays in responses to questions or concerns. McCaw is a local company. Kyle is the owner and fellow investor/broker. State of Texas requires PM's to have a real estate license. So the good one's will typically have their brokerage license by now because of their many years of experience. @Russell Brazil is absolutely correct on not focusing on just rates. McCaw does perform annual inspections with full reports with photos on all the rentals the manage. This has been very helpful to me in managing my rentals. Also, you are blind copied in on all work orders tenants submit. So you can stay on top of the PM with regards to maintenance. Not all PM's offer this. Also, each year at renewal of leases McCaw sends current rent comps with recommendations for lease renewal fees. Treat your long term rentals like a business and you will succeed. Any further questions please let me know.
Thank you, Joe. I will give them a call today.
Quote from @Michael Smythe:
@Kay Nemen you're making typical rookie mistake of ASSUMING that all PMCs provide the same services and EXECUTE those services exactly the same way.
You're solely focusing on costs instead of HOW their PROCESSES will effectively manage your investment.
So, you'll get exactly what you pay for - good or bad.
Thank you so much, Michael. I am a complete rookie when it comes to working with PMCs, so thank you for all the information. I will follow @Nathan Gesner's advice and ask them about their work process (maintenance, late rent, eviction, etc) and do more research. Besides that, do you have any tips on what to ask them or anything specific I should pay attention to?
Thank you again!
Hi @Kay Nemen, the bottom line is that you probably won't know if you made a good decision when hiring a PMC until it's too late. If you end up getting good tenants quickly and if there are no repairs, you may be lulled into false sense of security. It's when things go wrong or get complicated or challenging, that you will realize you made a good decision or not.
We acquire doors from competitor PMCs every week. Owners who are making the switch always have the same complaints and the same reasons to cancel with their current PMC and hire RES:
1) Poor communication. You are unlikely to find out if a PMC you are interviewing has solid communication unless you ask them specifically how they communicate, when they communicate, and what you should reasonably expect as a client for turnaround time on an email or a voicemail. It's shocking how poorly most PMCs communicate. Even during the transition to RES, we see PMCs routinely ignore emails, answer half the questions, answer with poor etiquette and low professionalism, etc. This will matter when you're in a business relationship with your PMC.
2) Poor accounting/ability to explain accounting. How your owner statements look, how easy it is to follow the money, when you will be paid, how you will be paid, how/when a PMC will communicate with you if there's a major repair coming down the pike or if your tenants have said they won't be paying rent until X date, etc. Most PMCs are very siloed and they will "transfer you to accounting" where your voicemail will go into the void, never to be returned. We see this all the time with competitors. Everything that involves money in/money out should be explainable by the person picking up the phone, and it should be articulated clearly. This is the number 2 reason we see clients switch from other PMCs to RES.
Best of luck, but also I would ignore this "Start by going towww.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics." <--- this is pasted here in BP constantly and it's untrue. NARPM is just like the BBB in that anyone can pay a fee and join, use the logo on their marketing materials, etc. You won't find us on that site and I would argue we are the most competent and professional PMC in Denver.
Real Estate Solutions4.3378 Reviews- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Kay Nemen partial cut & paste below:
EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!
This also leads owners to ASSUME simpler is better when it comes to management contracts.
The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!
We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.
We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:
We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.
EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!
Logical Property Management4.9455 Reviews - Member since 2021 · 4 posts · 0 votes2y
Quote from @Kay Nemen:
Hi all! Newbie here. I just purchased my first rental property and am in the process of looking for a good PMC to manage it. I spoke to 3 PM companies, 2 of them being RE brokers and property managers. This is my first time using a PMC, so I'd really appreciate some help from all of you. Here are my questions -
1. One charges a one-time onboarding fee and lease renewal fees, while the other two don't. Are those fees common?
2. One is a franchise PM company, and the person I spoke to seems to be very knowledgeable. She went in-depth to talk about maximizing rent and correcting all the safety issues that were mentioned in the inspection report. The other two won't really talk about any of that until I sign the management agreement. Both of them are RE brokers, too.
What do you guys think?
Thank you in advance!
yes the fees are common - every company I've talked to has a lease renewal fee, a fee for a new tenant, a commision rate (mgmt fee) and a host of other fees. You need to check to see if they nickel and dime you on every little thing - I mailed you a statement? That's $5 please, as an example.
If they aren't disucssing how they handle issues without signing the contract, don't sign. Keep looking for someone else.
I have one horrible pm right now. The issues are so much like Greg Weik's answer to you. If they are slow to respond at all right now, run. If you have to sign to get an answer on how they handle things, run. Mine is in breach of contract, but it's not worth filing a lawsuit. They'll be fired in the next month as soon as the tenant is out.
Nathan's list of questions would have been good to have when I was making my first choice.
I also ask - how do you handle a tenant not paying rent on time? What are the criteria you use to vet a tenant? How many evictions happen in the properties you manage over the course of a year? (the type of property impacts this number, but you can tell a lot by how they answer). What is your process for repairs (do you notify me for approval)? Email them a question. How long does it take to get an answer? If you call the number, does it go to voicemail.
I'd also say, be careful of the person who spends more time just shooting the breeze but later you realize they never truly answered your question. That's how your whole relationship with them will be.
- 2yPreston DeanBusiness MemberRealtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
Quote from @Kay Nemen:
Hi all! Newbie here. I just purchased my first rental property and am in the process of looking for a good PMC to manage it. I spoke to 3 PM companies, 2 of them being RE brokers and property managers. This is my first time using a PMC, so I'd really appreciate some help from all of you. Here are my questions -
1. One charges a one-time onboarding fee and lease renewal fees, while the other two don't. Are those fees common?
2. One is a franchise PM company, and the person I spoke to seems to be very knowledgeable. She went in-depth to talk about maximizing rent and correcting all the safety issues that were mentioned in the inspection report. The other two won't really talk about any of that until I sign the management agreement. Both of them are RE brokers, too.
What do you guys think?
Thank you in advance!
I can get you connected with a good PM company that I refer to all of my investors. I'll send you a connection request!
United Real Estate DFW Properties 565 Reviews - Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes11mo
How are you liking your property manager so far? Are they performing as expected?
- 11moAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
1. There are lots of hidden fees in property management. The 4 most common fees are 1. Leasing fee, 2. Management fee, 3. Renewal fee, 4. Maintenance fee. An onboarding fee... we do not charge this fee but there is time and effort that is put into brining a property on board.
2.More than likely if they are not willing to discuss it they probably feel like you are playing games and do not want to waste their time. I'm not sure where the inspection report came from but it is VERY unusual to be provided this and it is very time consuming to go through and diagnose.
Bartomeo Property Management4.7150 Reviews - 11moColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
Another thing you can do is ask other landlords who they are using for property management and what are their pain points. I wouldn't go soley by that but it is one point of reference.
- 11moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Why are people responding to an old post?
Logical Property Management4.9460 Reviews- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3mo
Quote from @Drew Sygit:
Why are people responding to an old post?
Maybe because those old posts were actually made by Humans?
- Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 30 votes3mo
Those fees are common, but "common" doesn't mean they're worth it — that's an important distinction. Onboarding fees and lease renewal fees can add up fast, and a 10% maintenance markup on top of already-high vendor bids is the one I'd push back on hardest. In 30 years of managing properties in Fort Worth, I've never charged a maintenance markup because I think it creates a conflict of interest — the manager benefits every time something breaks, which isn't the alignment you want. The real number to look at isn't any single fee... it's the total annual cost, and whether the PM is actually protecting your asset or just processing paperwork. If you're evaluating Fort Worth companies, happy to share what questions actually separate the good ones from the rest.
- Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 30 votes2mo
I've been managing properties in Fort Worth for over 30 years, so I can give you a straight answer. Onboarding fees and lease renewal fees are common, but the key question isn't whether they exist... it's whether they're disclosed upfront and easy to understand. The real trap is companies that quote a low monthly percentage but then layer in maintenance markups, inspection fees, and "coordination charges" that push your total cost to 20% or more. Ask each company to give you an itemized estimate of what you'd pay in a full year on a $1,800/month home — that's the only honest way to compare.
- 2moAlyssa MarquezBusiness MemberReal Estate Agent · San Antonio TX / Fort Lauderdale, FL · Member since 2023 · 120 posts · 29 votes
Congratulations on your first rental! From what I've seen, a one-time onboarding fee and lease renewal fee aren't unusual, but it's worth comparing the overall value rather than just the fee structure. Sometimes a manager with slightly higher fees can save you money through better tenant placement, higher rents, and fewer vacancies.
I'd also pay attention to how they communicate. The fact that one manager took the time to discuss rent strategy and inspection items before you signed is a good sign. I'd also ask about their average vacancy rate, tenant screening process, maintenance markups, and how often they communicate with owners. The right property manager is often worth more than the cheapest one.
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