Rental Property Investor · Baltimore, MD · Member since 2014 · 408 posts · 209 votes
Hello all (and thanks in advance!),
I'm looking for midsize apartment complexes (10-50) units, and I'm having some difficulty budgeting for property management expense. Here is my understanding:
On sfr and small multi-family, pm would usually run 8-12% of rent collections, plus incentives such as leasing commissions, renewing commissions, evictions, etc. On larger complexes (50+ units) that support full time pm, they usually charge 3-5% of collections, plus salary of those employed. Additionally, the full time staff should be able to handle most repairs, which means that you don't have to bring in outside vendors for every little issue, hopefully reducing the r&m expense, as well.
Assuming that's correct (please let me know where I'm wrong), what about these in-betweener complexes of 10-50 units? They don't really support full time employees (at least not a maintenance tech and a leasing specialist), but paying the higher percent to a pm company in addition to leasing incentives seems like it will add up to an awful lot.
Any and all feedback, information, direction, etc. would be greatly appreciated!
Real Estate Agent · Naples, FL · Member since 2016 · 298 posts · 268 votes
7y
50 is actually sometimes the most difficult to manage because you don't need a full time manager or maint person but often need close to that. Trying to find an onsite manager who would reside there and handle all duties usually works out really well in that size building.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
7y
7-10% on the 1-75 unit properties with leasing fees around $250-$500+/unit. Turn over depends on the market and unit mix, but you should be able to find that out by the PM. If is is 50% turnover ratio and you have a 30 unit building, then you would assume 15 units to be leased out at, say $400, so another $6,000/year.
Also, with properties that don't support a full time on-site manager and maintenance person, budget a larger amount for maintenance and turn over. This will depend on the market and the property type, age, class and amenities. I am typically budgeting around $700-$1000/unit for those items, but for a property that is smaller, I would at least double that.
To note a 75 unit property is often times too small to support 2 full time employees. I find it best to have at least 100 units.