An article by Hamish Turner (NZ)
There is a varying range of fees that property management businesses charge their clients for their service.
For the most part, there are 3 - 5 fees that are typically charged. They include management fees, letting fees, tenant lease break fees, maintenance processing fees, routine inspection fees, administration/statement fees.
Some of the less commonly charged fees include a marketing or advertising fee, passing on tenant database checking fees and lease renewal fees.
Understanding the varying fees within your market place can aid you in deciding what fees to charge new clients. The bigger part of fees and “selling” fees to your clients is of course highlighting or being able to sell not only your fee structure, but “your points of difference” to that of your market competitors.
For example, “we” charge a marketing fee which is within a range to that of our competitors, however, we not only provide a for rent sign, a newspaper listing and an internet ad, but we also provide a professional video marketing the rental property to prospective tenants. Also, if the property is empty for more than a 7 day period we upgrade the internet ad listing from a standard ad to a “feature listed” ad which sees it get 3 times the number of viewings.
This is purely an example, but highlights not only the fee being charged for say a “2nd level” fee, but also the variance in what the fee covers in terms of the varying service and points of difference to other agencies.
Some agencies simply charge the 1 fee for service. Although the 1 fee for service restricts varying means of income cash flow, it does simplify things for prospective clients and see’s heightened levels of conversion of new clients to say that of the more traditional varied fee schedule.