Property Management Fees | PropertyManager.com

To Fee or Not to Fee, That Is the Question

Posted on 17. Nov, 2010 by Marc Courtenay in Business

One of the many ways property managers earn a living is by charging fees for their services. And those fees can add up to a significant amount. Not wanting to nickel and dime the owners they work for, some property managers will absorb various costs or give away some of the extra time spent dealing with administrative issues. Often the hope is that this will help promote good will and create client loyalty. But what if the owner-clients don’t notice what they are getting for free, or aren’t aware of the sacrifices you’re making?

Recently I discussed this issue with Maria K. Morse, who is an accountant and business advisor to a growing number of property managers in central Florida. Property managers she knows and work for tell her that most owners are happy campers who willingly re-sign with their property management firm when the old agreement is about to expire. When it comes to fees, Ms. Morse believes that most property owners do not begrudge them. The rule of thumb from her perspective is, “If they are not complaining about them, leave well enough alone.”

She even advises her property manager clients to carefully examine what they are giving away for free. Then determine to charge reasonable fees for those services instead. “You never know what to take off the table until you put it on the table to begin with,” she wisely explained. “If you’re adding some new fees and charges to the statement, take the time to call your clients or at least send out a brief letter explaining what they are for. Again, most owners will understand.”

Some of the most overlooked fees include pay-by-check fees (versus electronic or EFT deposits) and fees for offering both hard-copy monthly statements as well as electronic, paperless statements.

How about trash collection fees and utility charges that are billed to and paid by the property manager? Shouldn’t these be passed on to the owners to pay? Ms. Morse emphatically answers “yes!”.

Another overlooked fee she called the “administration” fee. This fee covers all the miscellaneous work and responsibilities that are above and beyond the normal scope of the agreed upon duties of a property manager. Part of the administration fee can cover the work involved in keeping a vacant rental unit looking clean and presentable. Most owners would understand and accept it as an incentive to finding residents for vacant units which would both increase gross receipts and the property manager’s share.

There’s also the “initial set-up” fee charged when a property manager takes on a new owner or a new property. This one-time fee takes care of the extra time and efforts spent in setting up a system and organizing the data-base to track the rents and expenses as well as the other added responsibilities.

If the owner complains or doesn’t understand, this can open constructive channels for communication and negotiation. The main point, as Ms. Morse stated it, is that “…don’t cut yourself short as a property manager. You’re worth every last dime and dollar, and those dimes and dollars add up.”

If you’d like to contact Maria K. Morse you can email her at mkmorse51@gmail.com.

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