we've used a property manager for the last 6-7 years and have been satisfied. But starting to look at all cost in addition to the 10% management fee and beginning to wonder if it makes sense to look at alternatives. It seems that there is some level of profit margin built into other expenses - like the $65/hour maintenance rate, advertising fees passed on as well as other things that just make me wonder.
There's a lot of variables that go into the decision I know. We're not ready to be property managers as we (wife and I) are W2s and have 4 kids. No plans on quitting day jobs as we both have jobs that we love. She works her easy job 5-10 hours a week and then takes care of our busy household the rest.
But starting to look down the road at alternatives. Also having the discussion of as the number of properties increase so do the demands of managing the properties but so do the total expenses. We want to keep adding properties at a steady rate for us -1 or 2 a year - so scale is a consideration.
Long time follower. First time poster Thx in advance for help.
You being a landlord will depend on what yu want to spend your time doing and is that going to put enough money in your pocket. Where do you plan on being in 5 years with your business as a investor? I found that If I was doing hands on Land lording I was not able to work other deals as well and one or the other suffered. When your ready you could talk with the company and see where you can save or take on some of the work.
$65/hr for maintenance? holy cr*p! If you are otherwise thrilled with your management company then I'd have a talk with them and see if you can negotiate some of this down. I'd also interview some other companies to compare. to some extent, prices should come down as you add doors
BTW, my PM charges the actual hourly labor rate for the job, which varies depending on who he has to send (range from $12/hr to $30/hr).
Dan, while you sound too busy to manage them yourself, you definitely should take the time to interview a few more management companies. Ours is 8%, no extra fee to place tenants or advertise, but $150 per year admin fee for 1-10 properties. They are expensive for handyman issues, $49 per hour, I think, but they don't abuse it. For appliance or HVAC repair, they charge what the service company charges, no additional fee, and the companies they use are reasonable. Also, they are fine with us doing turnovers if we have the time, and we schedule inspections every year or so to take care of the little stuff ourselves, as we found it definitely lowers the amount of repair calls. If nothing else, it will give you an idea of what else is out there and then you can use it to negotiate rates down with your current company. Since you've been with them this long, it might just take a phone call, no further research needed.
Thanks for the feedback. Good points. I don't always pay as close attention to the reports as I probably should. Sounds like an honest conversation is in order and first step. I appreciate your insights.
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