A short YouTube monologue explaining how a property management company handles income loss during tenant vacancies and aligns incentives with property owners. The speaker proposes not charging management or lease-up fees while a property is vacant, and instead earning revenue through lease renewal fees when satisfied tenants stay, which avoids turnover and aligns interests.
What happens is you own a rental property and the tenant just left for whatever reason. It could have been a job change and they had to leave. It doesn't matter. It's vacant now you don't have income. Now you have a property management fee to pay when you don't have income. Now they've got to turn it to make it look good again. So now you have an expense there. And now it's going to cost you one month's rent to be able to find the new tenant. Like you're just getting hurt when you have zero income coming in. And so the proposal was how do we align interest with our investors? And it was stop charging to actually lease up the place and don't charge a management fee when the property is vacant. Now how do we make money? Got to put the owner hat on. Hey, let's make money by actually charging the lease renewal fees. Because what does that mean? We did a damn good job pleasing that resident. And they are staying. So you don't have a turn. You still have money coming in and we're actually going to get a fee for doing a good job. So that's how our property management company makes money.
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