What is a potential benefit of having incentive clauses in property management contracts?

Incentive clauses in property management contracts are designed to align the interests of property managers with those of property owners. By creating financial rewards based on performance metrics, such as reducing operational costs or increasing tenant satisfaction, these clauses motivate management to make more effective and efficient decisions.

For example, if a manager can save on utilities or maintenance without sacrificing quality, they may receive a bonus. This potential for additional compensation encourages managers to find innovative solutions and optimize resource allocation, ultimately benefiting the property's bottom line. This results in cost savings that can be shared with property owners, improving overall profitability.