Can someone explain rent growth based commission structure?

 

Two types.
% of growth.
If you ADD $100k to rent roll, you get % of $100k..
Or you get % over above certain rent level.

Exactly

If I remember correctly, your commission is based off what the new rent is vs the previous lease. So if the new rent is $1100 but the old rent was $1000, your commission is based off the $100 growth difference. The question is do they give you a percentage of that $100, $1100, or the first month’s full $100 difference?

When I worked for a company with a rent growth based bonus structure, they paid a base per lease plus 5% bonus on the rent growth up to a cap (different base and cap at each property). Example: prior rent $1000, new rent $1100 with a 12 month lease. Total rent growth for the lease is $1200. Payout would be $60 plus the per lease base.

Dayvee Sheldon Chase this is the way I’ve seen it done. A % of the annual rent differential. OR a % of the annual rent. So in your example above if there was no base lease bonus, I’ve seen 1% of total rent, so $120

It’s a solid business structure in a market where raising rent has potential and needs incentive for the team to sell it. Great model for renewals when you can get rent growth, save on turn costs and vacancy, and close the back door. Not a good commission structure if rents are relatively flat are falling. Little incentive for the time. Can be good to combine rent growth opportunities with a flat commission amount.