Just to answer one point, why would I charge less for creating LESS headache? I feel like if I'm doing a stellar job and have very little headache, that is worth a higher % then someone who isn't choosing well and has lots of headaches. Just the way I look at it. I try to charge mid-market rate, so I don't think my rents are low... I try to price them that way so I have more of a tenant pool to choose from, so I am able to choose those "no hassle" tenants. A buyer/owner might not care though!
Quote from
@Brandon Vukelich:
Congrats @Amanda Thompson for starting your own PM firm! I had one in Seattle for a few years, it can be brutal but I truly believe women are wired better than men for the biz. LOL! I also use a PM in Boise for my 26 units, they charge 8 percent. So speaking from experience on both sides, here's some feedback on your points:
- Extremely convenient for the buyer to not have to shop around for a PM company -- Not sure many investors wouldn't shop around if someone quoted 12% management fees. Even if a pain for me, I would shop for a better rate.
- all the infrastructure is in place (tenant accounts, payment portal, maintenance requests, leases, etc) -- So you want to charge a premium for systems already in place? If anything, that would lead me to believe the transition should be fairly smooth and easy. Nice that you may not be charging them an onboarding fee but I don't see why the increased management fee applies to this aspect.
- I hand-picked these tenants. I have high qualifications, so none of them have been a problem at all. They're all on 12 month leases. -- Great! So they are all great tenants, no issues or problems...shouldn't that equate to a lower management fee not a higher one since they are not on the "headache" list. You could charge the buyer a higher renewal fee for retaining such great tenants but again, I don't see the justification for a higher monthly management fee.
- My husband's company does maintenance, lawncare, etc so we would continue with that as well (although extra charges for the new owner as far as repair costs, etc). -- Not sure I follow this point. Are you implying that your husband does those things as part of (included in) the management fee? If so, I would see value there. If his company still plans to charge for maintenance and landscaping, still don't see 12% value other than you have a known, reliable vendor.
- The tenants know me, they know the system, it is a smooth transition with nothing changing except the person ultimately calling the shots. -- Same as above. So easy transition and no increased work load on your office's part. Again, not seeing the value in 2-4% above your competition.
- I do all my own marketing, social media, listing vacancies on websites, etc (we are at 0% vacancy) -- Many PMs can say something similar. I'm not sure of your total unit count but zero vacancy may imply your rents are under market.
- I have intimate knowledge of all previous maintenance and the layouts/highlights of each unit, relationships with subcontractors, and honestly I have personal (PROFESSIONAL) relationships with each one of my tenants. -- That's fantastic but my solid PM would be able to say the same for most of that as well, although I don't expect them to have personal (pro) relationships with each.
I don't mean to squash your perceived value at 12% but I believe there is too much comparable competition in a market like Boise to shoot that high UNLESS you can prove the value, financially, to the buyer. If you can show you can get rents up 20%, then 12% PM fee is easier to swallow. For example, when I bought my first apartment complex in Boise, the PM offered a flat rate until they reached a higher, target average rent, then the 8% kicked in.
That's the beauty of running your own business. No matter what input you get from online, you're open to charge whatever you feel is appropriate based on the level of service you provide. Best wishes in your success!
