Eight percent is not eight percent

Management is quoted as a percentage of collected rent, and the percentage is the smallest part of the bill. Two companies quoting 8% can be two hundred dollars a year apart.

What is usually in the quote

The monthly fee, calculated on rent collected rather than rent due — which matters, because it aligns them with you in the month a tenant does not pay.

What is usually not

• Leasing fee — half to a full month's rent, every time the house turns.
• Renewal fee — a few hundred dollars to re-sign a tenant who is already living there.
• Maintenance mark-up — commonly 10% on top of any work they arrange.
• Inspection fees — per visit, once or twice a year.
• Vacancy fee — a reduced monthly charge while the house is empty. Not universal, and worth asking about directly.

The question that settles it

Do not ask for the rate. Ask what the total was, last year, for a house like yours — one turn, one renewal, two repairs. The answer is a dollar figure, and dollar figures compare.

On a $1,600 rent, 8% is $1,536 a year. One leasing fee and a renewal can add another $1,100 to that, and only one of those numbers was quoted.

What we model

The percentage, at whatever rate you set, and the turn cost inside the vacancy assumption. Renewals and mark-ups are not modeled, because they vary by company rather than by house — which is the honest reason, and also the reason to ask the question above before you sign anything.