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Why do you collect your service fee at the beginning of the lease and not monthly?

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Below is a good question from one of our clients:

For yearly contracts or longer, can your service fee (one-month-equivalent rent, per year), be spread out and collected on a monthly basis (starting when the security deposit and advance rent is collected) instead of a single payment at the start of each contract year? The reason being:

  1. It helps spread out my financial burden.
  2. In my opinion, it makes more sense to spread out the compensation, since your obligation is for the full contact year, not just in the beginning.

For long-term lease contracts, what you’re actually paying for is the brokerage service for closing the lease contract with the tenant. When the lease contract for, say, 1 year is signed, the tenant is already obliged to pay you monthly for the whole year, whether or not you retain our services for the whole year.

The other items we provide under our service package are only value-additions. Because part of our goal is building long-term business relationships with our principals. If we help them maintain their properties well, they can rent the properties longer. This means more return on their investments, which we think is the purpose of every rental property.

And as long as we keep owners happy with our services, we benefit as well from continued business. We are all about making long term, win-win scenarios rather than quick profits that are usually unsustainable. So you can trust that we won’t just suddenly disappear after collecting our fee.