Number of units/on-site manager

Multi-Family and Apartment Investing

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Number of units/on-site manager

Jackson Long

Investor · Memphis, TN · Member since 2016 · 379 posts · 130 votes

How big of an apartment justifies and on-site manager?

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Levi T.Pro Member

Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes

That simple, one that produces the income to afford a PM. Likely it already has a office built into the complex if it is. However, the business of property management is changing quickly with technology. What once needed a on site PM, may not really need it anymore. It's up to you to decide if it fits into your budget and the need of the complex.

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Levi T.Pro Member
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
That simple, one that produces the income to afford a PM. Likely it already has a office built into the complex if it is. However, the business of property management is changing quickly with technology. What once needed a on site PM, may not really need it anymore. It's up to you to decide if it fits into your budget and the need of the complex.
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Marc C.
Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes
9y
it's hard to make work on fewer than 50 units. But that doesn't mean you can't have a resident be your eyes and ears on any sized property.
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Anthony CharaPro Member
Investor · Centennial, CO · Member since 2012 · 329 posts · 232 votes
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Generally, you'll put in an on-site manager when you get around 60-70 units. However, it does depend on the classification and condition of the building and residents. The older the building and the lower income the residents are, usually the more hand holding/supervision the property will need. My general rule of thumb is 1 FT manager and 1 FT maintenance person for every 100 units.
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
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@Jackson Long
It really depends and yes @Levi T. is right when he said a property that produces enough cash flow to produce the income to afford a PM. Also, double check your state requirement on multifamily and an onsite manager. I know in California the requirement is anything 16 units or more. That could be a manager that is an onsite resident that has a reduced rent for the position.
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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
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Thank you for the correction!
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Kim Meredith HamptonBusiness Member
Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
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I think once you get into that 70-100 units and depending on the condition of the property. You may be better served with a maintenance person.
There are many PM 's that can do things remotely in lieu of wasting an appt onsite for that person. Most applications, rent and maintenance requests can be done online. If you live close and have the time , you could do yourself with technology resources. Just depends on how much time you have available
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Account Closed
Investor · Orlando, FL · Member since 2016 · 1k+ posts · 780 votes
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It all depends not on how may units but if you live in the area where the property is, what is the NOI of the property is more appropriate questions to answer.
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Jackson Long
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Investor · Memphis, TN · Member since 2016 · 379 posts · 130 votes
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Thanks guys, this is interesting!
We are just moving into apartments now (negotiating on a 10 and a 16) so we are a long ways off still.
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Jeff B.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
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In Calif, MFUs of 16 or more, require by law an onsite manager. Don't hire one yourself as that makes you an employer and you have to deal with SSI and workman's comp. Instead, off loading the onsite to a PM will relieve you of that entanglement. Yes, that presents other issues, but there's no free lunch.
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Jackson Long
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Investor · Memphis, TN · Member since 2016 · 379 posts · 130 votes
9y
TANSTAAFL!
We are in WA so I am clear there. But good point on avoiding picking up an employee.
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
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Hi @Jackson Long. I agree with those who said about 70 to 100 units in general. Though this may be obvious, this reminds us why bigger is better in this business. a Property Manager for a 200-unit asset does not get double the salary as a PM at a 100-unit property. The economies of scale increase as you get larger assets.
The limiting factor is often the fact that the assets become too expensive at some point (say several hundred units) or in certain markets (like NY, SF, LA). Why? Because in some of these cases you will start competing with institutional players (like Life Insurance cos.) who can tolerate much lower returns and will outbid you on the purchase.
So what is the sweet spot for most operators? About 100 to 250 units. 70 at a minimum.
BTW, the 2 comments on California's 16+ unit requirement remind me another reason that market selection is so crucial. California is one of 5 states we will never invest in.
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Jackson Long
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Investor · Memphis, TN · Member since 2016 · 379 posts · 130 votes
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@Paul Moore don't tease! What are the other 4?
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Anthony CharaPro Member
Investor · Centennial, CO · Member since 2012 · 329 posts · 232 votes
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There's some misinformation being presented about California requiring an on-site manager. Yes, in CA, once you hit around 16 units, you must have a manager on-site 'for a period of time' during each day. I do not know if there is a minimum time requirement, but I do know they DO NOT need to be on-site full time.
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
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@Jackson Long. Ok, so there is a lot of money to be made in these states. I made a bunch in one of them. But I am into risk mitigation, and if I can make a great profit with much less risk, I will do it. So we choose not to invest in CA, FL, NV, AZ and ND. The "sand states" plus North Dakota. Very high returns when times are good. Plummeting markets at other times. I am all for catching those markets at the right time. But we are stewarding our investors' funds, and we will not put them at risk in this easy-to-avoid way.
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Jackson Long
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Investor · Memphis, TN · Member since 2016 · 379 posts · 130 votes
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@Paul Moore Thanks sir! Always looking for more perspectives!
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Dylan VonBank
Investor · Fargo, ND · Member since 2016 · 5 posts · 2 votes
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@Paul Moore
Fargo, ND is not the same as ND as a whole, just so you are aware. The Fargo/Moorhead (MN) Metro consistently remains a great place to invest in real estate no matter what is happening out West with the oil. In fact, when the oil prices drop and the workers get laid off, they come to Fargo searching for work, and thus need housing. Even in 'down times' Fargo has historically been good. It is important to make this distinction rather than lumping the entire state together.
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
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@Dylan VonBank. I completely agree, and I stand corrected. Thanks for your comment, Dylan. I've always heard great things about Fargo. Is that where you are located?
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Dylan VonBank
Investor · Fargo, ND · Member since 2016 · 5 posts · 2 votes
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@Paul Moore, yes indeed! I've been here for about 5 years now and I love everything except the snow! Fortunately it only sticks around for a few months a year.
How's the investing over in Virginia?
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
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Tough to get multifamily in VA - like most other states right now.
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Landan Dory
Austin, TX · Member since 2017 · 5 posts · 0 votes
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What is the best avenue to take if someone would want to be an on-site property manager? I am working for a PM company currently and have been for two years while attending Baylor. I know the ins and outs of the process on both the financial and maintenance side very well. I'm moving to Austin in May and due to the high rent prices (and of course the opportunity not to have to pay that rent) I want to look into using my knowledge to do the PM basics for a complex in exchange for a place to live and potentially an additional source of income. I have Craigslisted my advertisement for it but I don't know if there is a better way. Thanks in advance!
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Landan Dory
Austin, TX · Member since 2017 · 5 posts · 0 votes
9y
What is the best avenue to take if someone would want to be an on-site property manager? I am working for a PM company currently and have been for two years while attending Baylor. I know the ins and outs of the process on both the financial and maintenance side very well. I'm moving to Austin in May and due to the high rent prices (and of course the opportunity not to have to pay that rent) I want to look into using my knowledge to do the PM basics for a complex in exchange for a place to live and potentially an additional source of income. I have Craigslisted my advertisement for it but I don't know if there is a better way. Thanks in advance!
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Michael Tempel
Property Manager · Minneapolis, MN · Member since 2014 · 380 posts · 167 votes
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Originally posted by @Anthony Chara:
Generally, you'll put in an on-site manager when you get around 60-70 units. However, it does depend on the classification and condition of the building and residents. The older the building and the lower income the residents are, usually the more hand holding/supervision the property will need. My general rule of thumb is 1 FT manager and 1 FT maintenance person for every 100 units.
I would have to agree with Anthony, but if you are growing your portfolio my suggestion is to look at how you can include smaller buildings in the area using your larger properties as a hub or staging area for management/maintenance. In Minnesota we have used this technique to manage a diverse portfolio of large MF, Commercial, HOA and SF (800 units currently).
In some cases we have had one PM manage up to 200 units simply by using this structure. We push performance and rents to usually exceed market comps, so finding great employees and paying them well is key to making this structure work.
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Amber Gonion
Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes
9y
I would say about 50 units, but that would be part-time in office. The average manager can effectively manage 150-180 units at the most. I would not recommend giving an apartment to a manager, make money off the apartment and avoid conflicts of a resident manager. Caretakers that clean common areas can be given rent credit, but the quality of managers that want to live onsite is dramatically lower. Most professional managers with experience know better. A professional manager may be happy to work part-time. Larger companies will proved a manager that will also work at other buildings.
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