An owner agrees to pay the manager 8% of monthly collected rent for overseeing the building. What is this compensation called?
Correct Answer
B) Management fee
The compensation an owner pays a property manager for operating the property is the management fee, and it is most often set as a percentage of gross collected rent, sometimes as a flat monthly amount or a combination of the two. Here the 8% of monthly collected rent is exactly that operating compensation. Charges for other services, such as placing a new tenant, are negotiated separately from the management fee.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A freehold estate represents ownership of real property with an indefinite duration.
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
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A property manager prepares an annual operating budget that includes money set aside for roof repairs, painting, and other expected upkeep. What is that set-aside commonly called?
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