Confused about percent fee on rentals??? (Phoenix, Peoria: sales, rental homes, homes)

[szccdw]

I am looking now for a possible relocation within the next year. I keep seeing something about a percentage fee on rental homes. Example I just saw a home being rented for $1095 with a 4% monthly rental fee. Can someone please explain what this is. Thank you.

[Minntoaz]

It's likely because as a landlord they tax the rental income received but usually the landlord would just factor that in for the rent.

[PhoenixSomeday]

Because for some reason the laws here require a small tax to be charged on the rental once a landlord rents out X number of properties (varies from city to city). I've never seen it before in other places and it's honestly pretty petty. It is what it is I guess. I don't understand why it's not just included either, unless the law specifically requires it to be itemized.

[Roger427]

Originally Posted by PhoenixSomeday

Because for some reason the laws here require a small tax to be charged on the rental once a landlord rents out X number of properties (varies from city to city). I've never seen it before in other places and it's honestly pretty petty. It is what it is I guess. I don't understand why it's not just included either, unless the law specifically requires it to be itemized.

It's not included because the city can change the rate on a whim. If it's not included, the owner can pass the expense on to the tenant. If it is, they eat any increase.

[AZ Manager]

Originally Posted by Roger427

It's not included because the city can change the rate on a whim. If it's not included, the owner can pass the expense on to the tenant. If it is, they eat any increase.

That's only somewhat true; on the standard lease there is a seperate place for the tax so if it does go up it can be changed. So if my rent is listed at $1200 in Peoria the lease says rent is $1178.78 a month plus tax of $21.22 at 1.8% totaling $1200.00 and if Peoria increases their tax rate I can bump the rent in the middle of the term. Only property managers are playing this fee game and it is a deceitful business practice.

The taxes are very low but property managers add an additional fee on top of that bringing it up to the 4-5% you will see normally. It is done so their listings are caught in your search at lower rates so they can at a glance compete with people who don't play the games or don't have to pay the taxes and some Realtors are in on it or I'll informed. I've said things like sales tax is already included in my rate and had multiple agents look at their clients and say that is how it is always done, stupidity or lying it is hard to tell.

[Minntoaz]

Yeah I'd agree it seems deceitful and not a place I'd rent from. There are a lot of landlords that don't pull shady crap, go with them.