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Not all PM income needs to be from mgmt/leasing fees......

My life as a property manager got a LOT EASIER several years ago after a PM trade asso luncheon where we brainstormed ways to raise our income.....my pen could not write fast enough....on the 1.5 hour drive home, I thought of all the ways I could actually GET PAID for the work I do and knowledge/expertise I have by the people who cause me to use that knowledge and expertise...hence, I started charging TENANTS for causing me to work....

$100 per resident notice fee to serve any notice * pay or quit, accept rent with reservation, NSF/Late Fee

$50 per resident for late fee/NSF fee * re-deposit any NSF check and send a rent with reservation letter (notice) demanding $300 with next rental payment.

$400 lease re-write fee...they want out of their lease, they advertise and find new prospective residents and I'll re-write the lease to them....I don't re-write the lease until the $400 is paid.

20% service charge for any non-rent items deducted from their security deposit....they clean the home and the carpets OR I'll re-clean and charge them the cost PLUS 20%. In my check-out letter, I provide cards for a local carpet cleaner and house cleaning service.

Obviously, when monies are taken from the tenants' security deposit, I make my owner clients "whole" first from the deposit funds before I pay myself. Having just presented my 2007 tax records for tax prep, I realized almost 30% of my income is NOW generated from tenant fees.

Posted by Wallace S. Gibson CPM on 04/09/2008 08:28 PM

Comments (4)

Post is included in group: Property Management
Post is included in group: Landlord Issues
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4 Comments on Not all PM income needs to be from mgmt/leasing fees......

Wallace: As long as all fees are disclosed to your owner client in advance you can do whatever works. A real estate auditor once told me that earning fees in property management is all a matter of disclosure.

04/10/2008 11:26 PM

by Robert Machado, CPM MPM Sacramento Area Property Manager and Property Management (HomePointe Property Management, CRMC)

Actually * I do not have to disclose additional tenant fees. I am the agent for the property owner under VA disclosure laws - which are completely different from CA RE laws....we have buyer broker. My property owner clients know I get fees/income from residents; however, I do not get fees from vendors, etc. which is where the confusion often enters.

I'm amused when I see landlord posts that they want late fees paid by tenants....I don't pay mortgages and advise clients to have their mortgage payments debited from their bank and I'll remit net funds monthly to that account....I'm not responsible for collecting $$$ for the owner to make their mortgage payments....I'm responsible for administering the lease and maintaining the property.

I have a 18 page Rental and Property Management proposal which BLOWS CLIENTS AWAY....I charge the HIGHEST PM fees in our area and I get the NICEST properties.....when I tell would-be clients I charge the people who take my time THEY LOVE IT!!!

04/11/2008 07:16 AM

by Wallace S. Gibson CPM (Gibson Management Group, Ltd.)

In California we have to disclose all sources of income that relate to our property management business including application fees, deposit refund fees, etc. 18 pages is a lot to read, but if it works for you, great.

04/11/2008 01:47 PM

by Robert Machado, CPM MPM Sacramento Area Property Manager and Property Management (HomePointe Property Management, CRMC)

Good for you! Time is money. I put it all in the lease and enforce it if need be. My move out instructions are an exhibit to the lease. The tenant is well informed, yet I still collect should they not follow through.

05/10/2008 07:21 PM

by Josette M Newton, Property Management (BridgeWell Realty Inc.)

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