A. Procurement Fee
The biggest cost you’ll incur in the management process is in getting the property rented. It requires a lot of manpower, advertising, application processing systems, and move-in procedures. When you add outside costs, prospects standing agents up for showings, Atlanta traffic and screening time, it’s expensive to get a good tenant in the property. We charge the first month’s rent at the time of lease signing.
B. Monthly Management Fee
The monthly fees pay Sellect Realty for the day to day routine of answering phones; handling maintenance, unauthorized pets, HOA complaints, rent collection and evictions; monthly reporting; accounting for tenant charges; trust account management and handling emergencies, mold, dog bites, foreclosures and the like. These fees range from 6-10% and is calculated on the monthly rent. Our minimum monthly fee is $80/month.
C. Renewal Fee
A renewal fee isn’t for transacting the renewal as much as it pays for the past 12 months of good service that caused the tenant to want to stay. We start earning the renewal fee from the day we move the tenant into the property. Our average tenant stays 2 years so we’re on your side on this issue and know the importance of keeping them in the property, paying rent.
D. Early Termination Fee
If we’ve started marketing the property, posting it on rental web sites and putting signs and lockboxes on the property, we’ve already spent some real money. If you terminate us before we have a chance to lease it, the management agreement calls for a $250 marketing fee to recoup those costs. If you terminate us in the middle of a tenancy, there are some fees to Sellect Realty for your withdrawing your property. Management companies make their money be keeping tenants in the property for a long time and if you withdraw from our system you remove that important revenue stream. Like terminating a two-year cell phone contract, there will be some fees for terminating during a tenant’s stay.
E. Rehab Admin Premium
The monthly management fee pays us to manage “normal maintenance breakdowns,” not for overseeing rehabs, renovations, restorations and other large jobs. We differentiate the two by costs (under or over $500) and how it’s done (from the office or with multiple trips to the property). When multiple quotes and trips to the property are needed to oversee large jobs, stipulation #9 in our Management Agreement calls for a 10% add-on charge to help defer the costs of the manpower for that extra effort.
F. Charges for Tasks Outside Our “Scope of Service”
We have another document that outlines “what services you get for the fees you pay” and “what you’ll be charged extra for.” Obviously, the $80 monthly fee does not cover meeting with your HOA, digging out records from five years ago, meeting your appraiser at the property or shipping your riding lawn mower to Denver. Owners often ask us to drive out to the property to see if the hail storm did any damage, see if the neighbor picked up the swing set, pick up and forward their mail, locate the pool keys and see if they left the lights on. We’re happy to make these unscheduled, owner-requested trips, but we pay folks for this and the cost will be passed on to the owner. Atlanta traffic is brutal and at $4.00 a gallon these “short trips” usually take two to three hours and have some hard costs associated with them.