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TENANT PLACEMENT
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What is the charge for?:
The Tenant Placement Fee is used basically to cover the costs
of showing the property... time, gas, wear and tear on the car
etc. We guarantee the tenant up to 1/2 of their lease term.
What this means is that if they were to sign a years lease and
stay only 3 months, then we would put in a new tenant without
charging an additional Tenant Placement Fee. Of course, there
could be an additional Referral Fee because this is paid to
outside agents not affiliated with our office. If the tenant
were to stay 9 months of a 12 month lease, then we would charge
the Tenant Placement fee again when a new tenant was found.
We figure that if the tenant only stayed a couple of months
of a year term, then they probably were evicted, and possibly
it was something we could have foreseen. On the flip side, things
happen, and if they are in the property for at least 6 months,
their departure was probably something that nobody could have
for seen, and that's just part of the land lording business.
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When is it paid?
This is probably the most confusing "accounting" issue
that new owners have. Usually, the biggest reason for the confusion
is because owners forget that there is going to be a one time
initial charge for getting them the tenant. The payment for
this comes out of the tenants initial rent money and shouldn't
be confused with a "Referral Fee" which is money paid
to an outside broker that brings us a qualified tenant that
is accepted.
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| If you can't figure out where this shows as a deduction on
your statement, click the example at the end of this sentence
and you will see Cash Flow Statement with the deductions highlighted.
See Example. |
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