Good property manager terms?

[Austin Davis]

I am in the process of looking interviewing property managers. In my initial email to one of them, I asked for what they charge and he said for single family houses, they charge 1 months rent per year. I own three 4-plexes and he said that we could negotiate the terms. I would like to negotiate fair terms that incentivize the manager to run the property the way I want, which would be to fill units fast with tenants that stay long term and keeping the rent just under market rate. Any suggestions on terms, incentives and things to look out for would be much appreciated! Thanks!

[Wesley W.]

I've mentioned this in a few threads recently, but it seems to keep popping up.   @Brie Schmidt has a great method for incentivizing the PM so their goals are aligned with the owner's. She outlines the written contract with her PMs on one of the BP podcasts.

It's something like this...take 25% of gross monthly rent and use that as an annual "vacancy bonus." So for 10 units renting at $1000 a month, owner pays the PM $2500 vacancy bonus over the year. So each quarter PM would get $62.50 if that unit had no loss of income.