Today we’re talking about San Ramon property management fees – specifically, the perverse incentives of the traditional fee model that most managers use. The model has not changed for decades and much of the industry is operating the same way it always has. That’s through a fee driven model. The way this is set up, you’re paying a fee for every activity your property manager is involved in. It starts with a set up fee and then there’s a leasing fee, a monthly management fee, inspection fees and markups on maintenance work. You have to pay a fee for everything.

The problem with this fee structure is that it doesn’t mean the property manager is looking out for your best interests. They’ll pursue the activities that make them money. For example, there is a big leasing fee that’s paid every time your manager leases your rental home to a new tenant. That motivates your property manager to continually lease your property. This is good for the property manager, but it’s not good for you. High turnover hurts you and it costs you money. Don’t pay for things that are not contributing to your own interests.

There are alternatives to the traditional San Ramon property management fees. Specifically, you can choose a property management company that uses an all inclusive model. You will only pay one fee, which covers everything. That changes the incentive for your property manager. It encourages your manager to find and retain ideal tenants who will be there a long time, pay rent consistently and take great care of your property. When that happens, the all inclusive model helps you and your manager make more money.

We encourage you to look at both models and think about the way you compensate your property manager. Choose what works best for you. If you have any questions, or you’d like to hear more about all inclusive property management fees, contact us at Advantage Property Management Services.