BiggerPockets

We pay our current property manager 6.55% of collected rents. Why such an odd number? It was calculated from an agreed to "flat fee" based on an anticipated rent amount.

If we ever close on this Moreno Valley property, we have a PM lined up that charges 9% of collected rent.

We were paying 10% of gross rents.

I agree with Will. Great in the begining but then it goes downhill.

They don't fill vacancies fast enough and the expenses are double what they should be.

In the end you will break even or lose money, at least in my experience.

Chris

Originally posted by Bryan Hancock:
We also cap the amount they are allowed to spend on repairs without asking us about it first.

I did that as well and went even further to stipulate that ANY expenses needed my approval before hand and required a minimum of 2 quotes.

Originally posted by Max I:
I have a handyman manage my properties and I am paying him 6.66% (based on flat fee).

Sounds like he's managing the occasional repair, though (the day-to-day tenant stuff), and not the collections, marketing, and leases, etc. Correct?

My project manager is also my property manager (for now). He gets $1000 per property per year, which averages to about 10-11% of gross rents.

Originally posted by Max I:
...
Any issues with having my handyman manage my properties?

In some areas, a property manager is required to have a real estate license. I believe there are some exemptions to this such as employees (like buildings with lots of units under one roof). A property owner can always serve as property manager of course.

To summarize- it sounds like people pay between 6.55% and 11% to their PM and are generally unhappy with the level of service received.

Correct?

Originally posted by Jake Kucheck:
To summarize- it sounds like people pay between 6.55% and 11% to their PM and are generally unhappy with the level of service received.

Correct?

I was under the impression that a lot of the professional companies also charged other fees, like taking 50% of a month's gross rent each time they place a tenant, a flat fee for managing repairs, etc.

Is this not the case with you guys?

Orange County, CA Property Manager - 6%
Los Angeles County, CA Property Manager - 8%
Tulare County, CA Property Manger $50 per unit (when rented)
Fresno County, CA Property Manager - 6%
Dallas/Fort Worth Property Manager - 7%
Phoenix, AZ Property Manager - 7%
Durango, CO Property Manager - 8%
Tulsa, OK Property Manager - 7%

The companies that charge me 8% manage only one property, the rest manage multiple properties, giving me more negotiating room.

Property Management Companies can go bad, so stay on top of them. They can be good for ten years and then go south, just be ready to FIRE them immediately. I fired one we had for over 15 years.

I also make regular calls on them, via phone, email, certified mail and the occasional "WALK IN" to their office. I keep them on their toes!!

Originally posted by J Scott:
I was under the impression that a lot of the professional companies also charged other fees, like taking 50% of a month's gross rent each time they place a tenant, a flat fee for managing repairs, etc.

Is this not the case with you guys?

Not exactly. Our current PM never charges us for placing a tenant. Then again, he made a commission when we bought the property through him, so his palm has been pre-greased. He does offer $500 to any broker who brings us a tenant, but we've haven't had to pay that yet.

The PM we're going to use on our next property (if we ever close on it) charges a flat $295 for tenant placement. He's been a great help so far and still hasn't made a penny.