Hi. It’s George with Blackbird Realty and Management. Today, we’re going to talk about property management rates and fees, and we’ll do our best to explain those fees. The management fee, it’s important to remember, is always a negotiation between you and your property manager. It’s normally a percentage of the amount of rent that gets collected. However, some Las Vegas property managers will offer a flat fee — rented or not. In my opinion, the percentage is the much better way to go because if the property is sitting there vacant, the manager is not going to be doing a real good
job if he’s getting paid the flat fee anyway. Vacant properties mean no money with the percentage fee for the property manager. So, in my opinion, the flat fee is a bad idea for the owner. A leasing commission, commonly called a lease up fee, is used to pay another real estate agent who’s going to be involved in the transaction. Contrary to popular belief, your property manager isn’t going to be the one who finds every tenant in town for your property. He’s going to use his fellow realtors to find tenants. They’re going to have ready, willing and able buyers, and they want to be paid so the leasing commission is usually used for this. And it’s important to note that the larger the leasing commission, the more motivated the agent with the tenant is to bring them to your property. One of the things that I would caution you against
on these leasing fees with a property manager is that you only pay one in any 12-month period, so if they put a bad tenant in the property, and he’s only there for 3 months, and turns
into an egghead, and has to be evicted, you need to be protected against that in your leasing fee. And then there are lease renewal fees, which are typically a minimal expense — $75 or $85 something like that — for renewing a lease and getting a tenant into the office to sign. So, if you have any more questions about this, please give me a call. I’m happy to talk to you always.