Apartment Property Management Typical Fee Structure

Multi-Family and Apartment Investing
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Apartment Property Management Typical Fee Structure

Keivan Darius
Marietta, GA · Member since 2017 · 67 posts · 51 votes

I'm in the process of hiring a new PM company for our 30 unit complex. Their fee structure seems to be a bit high considering they charge 10% of monthly rental income. I wanted to run it by BP family to see what you have been paying or how your agreements are setup with your PM

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Michael Albaum
Rental Property Investor · Petaluma, CA · Member since 2018 · 203 posts · 164 votes
7y

Hey Keivan, that seems outrageous for a 30 unit building. Unless it's in a horrible area that will require a ton of babysitting, 30 units definitely seems large enough to get some bulk discount. I own property out in Covington, KY and have 30+ units under management there and am paying 7% or rent collected and 50% of 1st months rent as a lease up fee. 10% just seems way too high. Do they also have markups on construction/repair work that's done on the property? 

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  • Michael Albaum
    Rental Property Investor · Petaluma, CA · Member since 2018 · 203 posts · 164 votes
    7y

    Hey Keivan, that seems outrageous for a 30 unit building. Unless it's in a horrible area that will require a ton of babysitting, 30 units definitely seems large enough to get some bulk discount. I own property out in Covington, KY and have 30+ units under management there and am paying 7% or rent collected and 50% of 1st months rent as a lease up fee. 10% just seems way too high. Do they also have markups on construction/repair work that's done on the property? 

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  • Danny RandazzoPro Member
    Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
    7y

    @Keivan Darius 10% is not outrageous and it could be responsible as long as you are not paying any part-time or full-time payroll for onsite staff. If the PM team is remote then 10% seems fair. The most important component that will make or break your investment on the 30 units is management so make sure they do a good job and triple check their references.

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  • Matt Clark
    Roanoke, VA · Member since 2014 · 404 posts · 203 votes
    7y

    @Keivan Darius I’m sure it varies from one market to another, but it’s comparable to rates in my market.

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  • Keivan Darius
    OP
    Marietta, GA · Member since 2017 · 67 posts · 51 votes
    7y

    @Michael Albaum

    Thank you for the price point, do you pay 50% if they renew the lease as well?

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  • Keivan Darius
    OP
    Marietta, GA · Member since 2017 · 67 posts · 51 votes
    7y

    @Danny Randazzo

    At the money I’m paying 10%, my current PM charged us $2000 setup fee. But no lease or lease renewal fee. But they are very bad on handling maintenance issues. They have no tools or someone they can send for emergency.

    The new PM started as a maintenance company and added Property management for about 5 years now, they are both offsite. However what got my attention the most is 75% lease fee and 25% renewal fee. I wasn’t sure if that is normal in C class area (poor but not dangerous)

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  • Keivan Darius
    OP
    Marietta, GA · Member since 2017 · 67 posts · 51 votes
    7y

    @Matt Clark

    May I ask how much you pay for lease fee and lease renewal fee?

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  • Matt Clark
    Roanoke, VA · Member since 2014 · 404 posts · 203 votes
    7y

    @Keivan Darius I actually self manage, but it’s common here to pay a full month’s rent as the lease up fee. But I don’t recall hearing about anyone who pays a fee at renewal though.

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  • Michael Albaum
    Rental Property Investor · Petaluma, CA · Member since 2018 · 203 posts · 164 votes
    7y

    I pay a flat $195 for lease renewal

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  • Keivan Darius
    OP
    Marietta, GA · Member since 2017 · 67 posts · 51 votes
    7y

    Thanks a lot for the feedback very appreciated 

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