Was hanging out with a friend of mine in Nashville TN a couple of days ago, and I knew he had investment properties, but it's not something we've ever really talked about. Mentioned to him that we were under contract for our first (a duplex) and was just running through the numbers with him and he stopped me and said "You're only planning 10% for management fees", I was thinking he thought that was high and said yes, but once we got our door counts up we were expecting to be able to find a company that did it for 8%. He said I was way low and he's paying 30%, I asked if he was talking about an apartment complex or short term and he said no, multifamily buildings.
So my question is, is the Nashville area just crazy expensive for a property management company, is my 10% that I'm planning super low (I'm planning on managing it for a few months just to see how it goes before finding a PM, and I'm in upstate NY). Or is he being ripped off? I wouldn't think he's being ripped off, he's been doing it for a long time, and he runs a couple other businesses that do really well, but 30% sounds crazy to me as a newbie.