Q: What happens if I find a tenant from source other than my PM?

Possibly. It depends on the contract you have with the original property manager. If the manager is paid strictly a percentage of rent paid on the unit, you’d likely be obligated to pay.

The manager isn’t earning a commission for bringing on a tenant – you have just aligned the incentives that way.

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Now if you have the contract written so that the property manager is paid a percentage of rent collected,
you might be able to weasel out of payment. But that management firm is going to expect to be your collection agent throughout the rest of the lease term, or you probably aren’t compensating them to work very hard for you. Doing an end run doesn’t seem like a very good way to forge a partnership between you and your property management company.

If the contract has you paying the property manager a set monthly fee not related to rent collection, then the source of the tenant doesn’t matter, except insofar as you’ll have to pay a commission to another manager or realtor or somebody else.

That said, when you forego the property manager’s input and processing with a new tenant, you give up a lot of value. Much of the value that property managers deliver comes at the point of tenant recruiting and selection:

 Application screening
Interviewing
Employment/income verification
Credit checks
Criminal background checks
Property showing
Move-in inspection and inventory
Regulatory and legal compliance

Author Bio
Writing about personal finance and investments since 1999, Jason Van Steenwyk started as a reporter with Mutual Funds Magazine and served as editor of Investors’ Digest. He now publishes feature articles in many publications including Annuity Selling Guide, Bankrate.com, and more.