Property management: is this a red flag?

[Kyle Hern]

Hello fellow BP members! I'm still working towards my first real estate investment and trying to build a team. I was looking at a few companies in Indianapolis and found T&H Realty Services. They look great and seem to have everything an investor would need. However, I noticed that their pricing was unusual (I think). I recall reading that most managers charge a percent on the rent, but T&H showed their pricing in a dollar amount. They charge $3,100 per year on a property renting for $1,000 per month. I also remember reading that property managers should cost about 8%-12% on the rent. However, $3,100 in PM cost divided by $1,000 per month multiplied by 12 months is about 25%. From what I've read, this is a bad deal, but, since I'm new, I'd like to hear from you. If you have anything else to add about T&H, I'd love to know. Or, if you have a suggestion for who I should use as my PM in Indianapolis, it would be greatly appreciated.

Thank you!

Kyle

[Jeremy Tallman]

Hi Kyle, I'm the owner of T&H. I believe you misunderstood our pricing page. Our model works as follows: We charge a one time leasing fee, and then a 10% management fee thereafter, or 12% if you select our premium plan. The $3,100 you are referring to was simply an example to show the comparison of what you would pay with our company over the course of the year with a $1,000/month rental as opposed to some other companies who charge differently than we do. I.e. we have a higher leasing fee than some companies, but we do not charge any onboarding fees, vacancy fees, marketing fees, etc.  

Of course we are not the best fit for everyone and we understand that, but I would love to speak with you further if you feel this cleared things up. 

Also thanks for the feedback! This let me know we made need to tweak our Pricing page to make things more clear. 

Thanks!