Like buying and selling agents, property managers also run into landlords who want to negotiate our commissions. I recently had an opportunity to reduce my commission in order to manage a very exclusive home that the owner wants to place on the rental market because he has been unable to sell it. I respectfully declined. Here is the rational I used. Thought you might find it of interest.
There is legitimate rationale in having our commission based on a percentage of the rent; the higher the rent, the more difficult the unit is to rent. My expenses, and yours, go up rapidly as I sequentially advertise the unit and show it over time. Please consider the fact that my time spent unsuccessfully marketing a high-priced unit can better be spent working with units that are priced at a level where there is a large pool of potential tenants. The product I have to sell is my professional time, and it is very valuable when applied to units that rent quickly.
With this kind of a home, there is always the potential that it will not rent at all, especially if I am stuck with a fixed rental rate over time and in which case I will have put in a lot of expensive effort in attempting to get it rented with no return whatsoever. This situation where the home doesn't rent is totally unacceptable to both you and me.
I am thus not willing to make an adjustment to my fees, particularly if you are going to plan to rent the unit at a level that will cover all of your expenses. I do not believe it would be a good business decision for you to attempt to rent the unit at a level that will cover all of your expenses because of the anticipated cost of having the unit vacant for an extended period. If you are going to need to cover your expenses as outlined, renting the unit will be so difficult that I don't believe I can rent it in any reasonable time and my costs will be higher than I am willing to accept.
I will be willing to take the unit at above $5,000 per month rent only with the stipulation that you would be willing to authorize me to drop the rent after a fixed period of perhaps 60 days with repetitive drops in rent until I would be able to rent the unit. Otherwise, this will simply turn out to be a lose-lose situation for both of us.
Please let me know if you are willing to work with me under these terms! And thanks again for considering me to be your Property Manager.
It always feels good when I do something like this.
Jerry Bangerter, RA Property Manager, RE/MAX Kai Lani, 25 Kaneohe Bay Drive, #109, Kailua, Oahu, Hawaii, 96734 -- http://www.rxkl.com/