STRATEGY
PROPERTY MANAGEMENT
The Morals of Ancillary Fees QUALITY SERVICE AND PRODUCTS OFTEN REQUIRE HIGHER REVENUE.
by Todd Ortscheid
or the last few years, “fee maxing,” as it has come to be called by many, has been a big part of how property management companies across the country have been growing their same-door revenue. For my company, this has certainly been a big driver in profit- ability the past two years as we have implemented many new ancillary fees. Of course, as with any change to industry norms, this has spurred some debate, and some people within the industry have objected to these fees, even calling them unethical or “immoral.” However, the opposite may be true: not only are ancillary fees not immoral, they are inherently moral and arguably an absolute necessity if you are to provide a quality product to both your clients and tenants. First, we need to examine how the industry has changed over the last decade. When I first took over management F
of our company in 2012, we were still using old desk- top-based software that was bare bones at best. There were no tenant portals or owner portals, no self-showing lockboxes, and even websites were pretty primitive for most property management companies. This was only sev- en years ago! Yet, the industry landscape was completely different from a technology front even that recently. But as we all know, while technology brings many benefits, it also brings many costs. Some of this is offset by added efficiencies. But a lot of it is not. For exam- ple, when using our old desktop property management software, there were no ongoing fees. We paid one time for the software license to manage 100 doors, and we never paid again. That all changed when we signed up for a cloud-based property management platform. Suddenly, we had big monthly fees that we had to pay indefinitely for
56 | think realty magazine :: february 2020
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