Saving Fees Costs Money

So, our dream clients who are thrilled to bits with the increased rent we get them have their property in an apartment block with around 20 other apartments.  One of the other owners of an apartment in the block has worked with us on a number of issues with common property areas, and he was seriously impressed with what we had done to improve the property overall and make headway where his efforts in the past had not.  He had his property managed by another company.

'Well, if you like what we do, let us do it for you', we urged.
'I'd like to,' he responded, 'but I get a better rate for property management with the other company, they are several percentage points cheaper'.
Gulp.  How do we compare then?  We had to find out.
'How much rent are you getting for your property?' we asked.
He told us, and we told him how much we were getting for a property the same as his in the same complex.  He was impressed.
'But I get a cheaper rate with the other company' he repeated.
'How much do you make from the rent after your management fees are considered?' we asked him. 

He calculated and came up with a figure.  While he was doing that, we were calculating how much our other clients with the same property got in-hand.  Guess who got more?  Our clients, who paid more in fees.

Was he convinced?  Maybe.  Did he take action?  Not yet.  Is it costing him?  Certainly.  Is his cheaper management rate better?  Heck no, you get what you pay for.  Not only was he not getting as much in hand from his property, he wasn't getting any action from his property management company on the issues that bothered him for years.  Sure, he wasn't paying as much, but he wasn't getting as much either.  He really needed to figure out if a smaller piece of a bigger pie was better than a bigger piece of a smaller pie.  In this instance, his bigger pie meant a much bigger serve for him.  But he couldn't see it, as he was hung up on the percentage fee.

If you want to know how much bigger his pie would have been, it was in the four figures range, and went up from there.  Yep, percentage matters, but not as much as what you get for that percentage.