How Profitable Is Property Management?

[Bill Gulley]

I received a question about profitabilty of being a PM. I thought about it. I've had PMs at times 10% of rents. I'm thinking around here average rents are probably $500, that's $50 bucks plus first months rent.

$1100 a year. Seems you'd need 50 units for a living, 55k gross.

Then start looking at expenses,

Fill in the blanks.....

Advertising
Auto Exp
Office Rents
Office Supplies
Office Fixtures/Equip.
Legal Exp
License and Cont. Education
Membership Fees MLS

Assuming you need a license, Realtor fees and education requirements are there.

Where is the break even?

But here is the other aspect, how long does it take to get 50 units under management? Any guess?

You could pick off one complex and get that, but assume all the bigger owners have a staff/employees and you pick up no more than 5 units (sfd) at a time.

Where is you guess in time wise in getting a PM business going?

The PMs I know have been around for decades, 1,000+ units, I watched them grow, but it seems it would have been long and slow going.