On-Site Property Manager Compensation in California?

Question

We just purchased a 36 unit apartment complex and are trying to come to an agreement with the existing on-site property manager around what reasonable compensation is. His request is to be paid full time at minimum wage, and to receive free rent ($1,500/mo value). This puts his total compensation at around $48k on a building that will likely bring about $720k gross rents, in time.

Note that his main function will be to act as a maintenance man, and to be on call for the typical needs, and we will be handling everything from an administrative perspective. We are new to this industry, but we just don't see how he can create $48k in value for us, given what we'll require of him.

How reasonable is his request, and what would be a normal compensation package look like for someone in his role?

Matt Devincenzo · Answer

Account Closed you need to check the State requirement for onsite managers of properties with more than 16 units. There is a compensation component you need to ensure you follow so that you're not violating any rules. To me though it sounds like you're getting management and much of your maintenance accomplished for ~6% of your gross rent. I doubt you'd find that if you hired an outside manager.

Justin Jackson · Answer

@Chase Banta

Sounds like an escalation clause of on time rent payment collection and occupancy could greatly benefit you.

Maybe 3% if 90% occupied and 90% on time payments

5% for 95% occupancy and on time

7% for 100% and 100, might be surprised what a dangling carrot might help you accomplish!

Michael Din · Answer

Your getting by cheap. I live in Central valley and the managers I know make around 65k + all utilities paid and free rent. They took care of everything all the owners had to do were collect a check.

Account Closed · Answer

I've posted in a few places and what I've come to suspect is that our person fills the role of a full-time on-call maintenance man, and point of contact for tenants who haven't adopted online/text communication. He requires full-time management, there's no way we could ever get to a "just collect a check" sort of place with him.

Laura Marks · Answer

I don't live in CA but a quick Google search indicates CA Pm's average  $116,004. I'd say you're getting by pretty cheap on minimum wage and an apartment.

On-Site Property Manager Compensation in California?

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