Money & Investment
Should Your Management Fee Increase Every Time Your Rent Does?
Your tenant's rent increases.
Should your property-management fee automatically increase by exactly the same percentage?
Under a percentage-based management model, it generally does.
If the management fee is 10% and rent rises from R10,000 to R11,000, the monthly fee moves from R1,000 to R1,100.
That arrangement is simple and widely used.
But it raises an interesting question for hands-on landlords:
Did the management workload increase by 10%?
The answer depends on the service.
If an agent is delivering comprehensive property management and taking extensive responsibility away from the landlord, percentage pricing may be entirely appropriate.
But where the landlord remains involved in the physical property and important decisions, fixed-fee lease management offers a different philosophy.
The landlord pays for the administration and management function rather than automatically paying more simply because the underlying asset generates higher rent.
Neither pricing model is universally correct.
They serve different operating relationships.
The important thing is knowing which one you're buying.
LeasePilot Thinking
LeasePilot separates the value of the property from the administration of the lease.
For the right hands-on landlord, that can create a more predictable relationship between the service received and the fee paid.
Own the Property. Not the Admin.
If you're a hands-on landlord who wants to remain in control of your property without carrying all the administrative workload yourself, see whether LeasePilot is the right fit for you.