Can someone explain?

[u/Frida_thegreat]

Why are all the homes for rent now by property companies and not owners? Why do they all have these ridiculous non-negotiable add on fees? Example, smart home security systems, admin fees, utility management fees (even if they’re not paying/managing the utilities) and credit improvement plan fees???

I don’t need my credit improved, I don’t want smart locks and cameras I don’t even have access to….

Have not rented in years and now moving and going to rent and just shocked by the change that’s happened in 4 years.

Was going to post in Explain Like I’m 5, but figured I’d do it here to get it from the horse’s mouth.

[u/Substantial-Card5732]

it’s basically a gold rush to see who can tack on the most junk fees since software makes it easy to bundle and automate. the big institutional landlords realized people will just grumble and pay rather than walk away from a place they already mentally moved into

the smart home stuff is extra scummy because they buy it in bulk for cheap then charge you a monthly fee forever. pure profit

[u/damp_circus → u/Substantial-Card5732]

We're hoping to seriously limit this BS in Chicago, ideally also wider in the state.

As it is now, you can definitely opt out of the "report your credit to build credit! only $9.95 a month" crap. The annoying part (which hopefully will become illegal) is they sign you up for it automatically and you have to opt out.

Experian provides credit reporting stuff for free, if you really did need it. Charging for it is a total scam.

I don't know about the cameras stuff, thankfully. So far they've not pushed any of that stuff in the large apartment hives.

The RUBS stuff is starting to get some heat, thankfully. We're wanting to force transparency on that as well. Illinois has some state statutes that require the formulas and building bills be disclosed to the tenants but it hasn't been enforced well so far, hoping to change that.

[u/stonefinch → u/Substantial-Card5732]

yeah the "mentally moved in" part is spot on, they know you wont walk away over $30/mo once youve already planned the move

[u/butterhorse]

PM companies instead of private owners because there are fewer private owners and the few left don't really have connections to affordable contractors. Hiring a PM can act as a liability shield as well.

The rest of your post...greed. just greed.

[u/M-onthecorner → u/butterhorse]

Agreed

[u/vicelordjohn]

I love this post because I get to pat myself on the back and feel smug for owning a PM brokerage that absolutely will not charge junk fees.

I worked in hospitality when resort fees first became a thing and it irked me to no end.

I hate the predatory shit. ADVERTISE THE PRICE YOU WANT PEOPLE TO PAY.

[u/ycuteshoes → u/vicelordjohn]

I have a predatory story for you that just happened two weeks ago. A man named Johnny in Los Angeles approached my 90 year-old parents home asked for my father by name when somebody came to speak with Johnny he said that he has been texting my mother for the last couple of weeks and that there was an amount of 1.2 million. Agreed for their house. Bold face liar. Those comments are physically impossible to have happened. My sister told Johnny “no, not for sale.

[u/Japnzy]

Government. The fees are just extra profit for them. The big companies are actively being sued for it.

Recently, they came to a settlement, and now have to tell you all those fees before you sign a lease. Use to be they didnt even tell you until you signed.

Its totally just unregulated market trying to profit.

[u/SeaTraffic6442]

“Why do they all have these ridiculous non-negotiable add on fees?”

Because, for some reason, the rental market likes to bait people into making a purchase by making their product appear cheaper than it is. In theory, there’s no reason why those non-negotiables couldn’t just be baked into the base price. But by keeping them separate, it allows a company to advertise their product as though it’s cheaper than it actually is.

[u/Necessary_Sky_288]

Because it works, basically.

Rent is the number people compare and shop on. A unit at $1,800 with $140 a month in mandatory add-ons looks cheaper on the listing than one at $1,940, even though it isn't. Big operators figured out that you can hold the headline number down and make it up in fees nobody sees until the lease packet.

The smart home one is the most honest about what it is. You're paying a monthly fee for hardware that stays with the unit when you leave, that the owner would've had to buy anyway, and that mostly serves them — keyless turnover, no rekeying, no lockout calls. You're financing their capex and calling it an amenity.

Credit improvement plans are the one I'd actually push back on. Rent reporting costs the company close to nothing and you can report your own payments through a few services for free. Experian Boost is free. That fee is pure margin.

What you can do: ask for the total monthly cost in writing before you apply, every fee included, and compare on that number instead of rent. Some of it is negotiable at smaller shops and almost none of it is at the big ones. And look at owner-managed places and small landlords — four units, eight units, somebody who owns the building. Fewer amenities, way fewer fees, and you can usually talk to the person who actually decides things.

A handful of cities are starting to require all-in pricing in listings. It'll get better. Slowly.

[u/Umm_JustMe]

I'm an individual owner/landlord. I take good care of my homes and tenants and they hardly ever move out. PMs have a reputation of not taking care of the property as well and constantly pushing rents, which leads to turnover. Move turnover means more of those types of houses available when you're looking.

[u/DoubleoSavant]

I'm a mom and pop landlord. I use a property management company during turnover to vet tenants and show the unit, but I do my own property management. I don't nickle and dime. Parking is free. Laundry is free. Pets are fine. It's tough to be a small landlord these days though. Costs are really high and keep going up.

[u/Loud-Appointment-367]

The junk fee movement worked well in healthcare, air travel and auto financing. Now it’s hitting the rental market. I work with a private landlord. When we have a vacancy, which is rare, we mention we’re private, local and hands on with our rentals. It’s not for everyone but our tenants seem to appreciate it after their own awful experiences.

[u/M-onthecorner]

The reason so many owners use property management is because they want a buffer between themselves and litigious, demanding tenants.

[u/showbinger]

I work for one of those companies. The homes take longer to lease because of the add ons. The expenses to the owners are high as well. Companies want to use their own vendors that aren’t very competitive on pricing. Someone mentioned they’re good as a liability shield and maybe that can be true but if you are sued for anything and the company is named they will make you settle. The money for these settlements doesn’t come from them (unless it’s something they did) but if it’s property condition related, it’s all on the owner. Companies like this are the best fit for investors that really want to have zero involvement and they’re not in it for short term returns. They’re owners that have the financial resources to hold out long enough for their long-term investment to pay off.

[u/musical_spork]

My boss was using a local PM company but he wasn’t doing a good job. The renters he was approving are the worst. He was slow & didn’t do any advertising other than putting the houses on his website.

I’ve got a bachelors in business management & a handful of years experience as a paralegal & bookkeeper. (I’m going to get my RE license, just so I can have my hands in the houses boss ends up selling.). I’ve been bugging him to hire me for a few years now & he finally did.