I am writing this post completely from the perspective of a consumer who has a rental property and is looking to hire a property manager in Hudson, FL. The last few I have dealt with really left a bad taste in my mouth. I sincerely hope a GOOD Property Manager reads this and tells me I have it all wrong. I would love to have more faith in an industry that I love.
So here goes--
One of my biggest bones of contention with Property Managers is that they typically charge one month's rent for placing a renter and 10% of the month rent thereafter. Good if you are charging $400/month rent, but I am asking $1750/month. This is a lot more than the average rent in the market, however I have always found a renter in 3 weeks-3 months simply by using Craigslist.
I ask PMs why they charge this large finder's fee when interviewing them and they say to cover their advertising costs. Ok, I get that. But my question then is what EXTRA ways are you going to market my $1750/month place verses the $400/month place you also have on the market. NOT ONE PM has ever given me a good answer to this question, making me feel like I am basically subsidizing all the PM's advertising. If all properties are marketed the same way, shouldn't all finder's fees be the same?
Then the second question I ask PM is- If marketing is such a big expense upfront for you, what if I do some of my own marketing as the homeowner, field all the calls, and then if anyone is interested in seeing the place I will refer them to you. Of course I would expect some discount having been the one who actually found the renter. At that point, the only thing the PM can do that I can't is physically show the property. Shouldn't I get a reward for doing the hard part (which is how this task is described to me in the interview process)? No PM I have ever interviewed has been willing to offer me one.
Then you move on to the monthly 10% charge. Most of the same questions apply here too. What extra work are you doing with my tenants where you are getting $175/month verses the ones where you are recieving $40/month.
The whole system seems broke to me. I think there should be some sort of a la carte system. Or maybe it should work more like an attourney where you bill by the hour, so you are actually getting paid for the effort you put into serving your client. As it stands now, I feel like I am being punished for having a home that rents at higher-than-market averages.
As I said above, I hope a Property Manager will read this and educate me on why they charge what they do (but no one that I have talked to has been able to convince me otherwise yet).