Peter Lohmann identifies three signs your PM fee structure isn't working: owners constantly questioning fees, you getting defensive explaining them, and underpricing while still losing clients. He advocates a flat, all-in model that includes inspections, photos, and tenant screening, aligning your incentives with owners so they benefit when rents rise.
Hey Peter, how do I know if my fee structure sucks? If owners are constantly questioning your fees, or if you're struggling to explain them without sounding defensive, that's a red flag. A good fee structure is clear, fair, and easy to justify. For example, at RL Property Management, we use flat fees instead of percentages. Why? Because it keeps costs predictable for owners and avoids tying our incentives to rent levels. Owners keep more when rents rise, and we stay aligned with their goals. That's a win-win. Another sign your fees might suck? If you're underpricing yourself compared to competitors but still losing deals, that usually means your value isn't clear. For instance, we include inspections, photos, and tenant screening in our fees—services some companies charge extra for. It's an all-in structure that's easier for owners to understand and trust. Bottom line: if your fees don't reflect the value you provide, or if they're confusing to explain, it's time to rethink them.
