How much do you charge per door?

Question

With most investors  self manging or owning property management companies themselves, how do you decide price per door for new clients? Thanks

Bob S. · Answer

8% or 80 PER depending which is higher

Melanie Thomas · Answer

I would urge you to shop your local competition. Call around as a property owner looking for management and get all the details. Its more than just the management fee. Look at all other fees that you would be charged during your time with them. Renewal fee, leasing fee, inspection costs etc. Good luck and happy investing!

BizDev Mastermind is a company you can engage with to do the competition shop for you. :)

Jay Thomas · Answer

It is full service. They do tenant place, maintenance calls and if the Tenant breaks the lease they replace them for free. I can connect you to the property manager my team uses !

Timoteo Guy · Answer

@Jay Thomas That seems like a crazy good deal. Does that include full service or just leasing?

Bud Gaffney · Answer

Nathan for the win :)

Drew Sygit · Answer

@Timoteo Guy many factors go into pricing:

1) Locality (city/state)

2) Neighborhood & Property Class (time to manage Class A < Class B < Class C < Class D)

3) Property condition (slumlord properties hard to manage)

4) Number of units (some economies of scale, but not as much as owners think)

5) Owner expectations (some owners really want a personal assistant!)

Don't confuse SFR pricing with that of MF. It's always interesting when a newbie owner contacts us stating they saw 4% online and want that for a SFR! We've seen 3% for 100+ unit apartment complexes, but they also have onsite staff not included in the 3% management fee.

Two other pricing options to properly understand:

1) Fee charged based upon tenant payments or just occupancy. Some PMC's will charge a lower percentage fee, but will charge it whether tenant paying or not. Challenge is where is their motivation to properly screen applicants and get rid of nonpayers?

2) Many flat fee PMC's charge whether property vacant or occupied, tenant paying or not.

Lots of games also played with Maintenance fees. Many claim they do not charge a markup, but then aren't transparent with invoices, etc.

1) If a PMC charges $x hourly, their markup is built into that hourly rate as they are NOT paying their workers that hourly rate.

2) Many PMC's send you ONLY their invoice, or from their wholly owned maintenance company, not the underlying invoices from Home Depot and contractors. What markups do you think they may be hiding from you?

3) If their handyman can't handle a repair issue and they have to hire outside contractors, many PMC's will then charge a markup for their time - but they don't tell you this upfront or disclose in their management contract. NOTE: we agree with charging for their time, but not the lack of disclosure.

4) Some PMC's also get kickbacks from contractors, so the price you see on the contractor invoice sent to you, is really not the true price. Unless they cover this somehow in their contract, this is illegal.

Hope this helps!

Wesley W. · Answer

Hey @Nathan G., as huge fan of capitalism, I'm perplexed by your answer.  Shouldn't your fees be higher, absent market competition?

Nathan Gesner · Answer

There's no fixed price and what people charge varies greatly across markets. I'm in a small market with almost no competition, so my fees are lower than what you may see in Atlanta or LA where competition is higher.

Most managers charge a % of the monthly rent but some are charging flat fees like $119 per door.

There's much more to it than just the management fee. Again, it varies by market and manager, but there are at least 100 different fees that can be charged to an owner or renter to increase the manager's income.

Jay Thomas · Answer

Hey!!

In my experience I have seems $90 per door be the starting factor for alot of management companies. They reduce the price as you get more doors or after the relationship builds and they realized they need to do as much for your property as far at customer service and maintenance

How much do you charge per door?

Most Popular Reply