How Much Do You Pay Your Property Manager?

Landlord Forums & Rental Property Questions 67 Replies

Pretty simple question... but:

1) I know that some/many of you self-manage. You don't need to tell me "ZERO" and elaborate on how great you are. I get it.

2) I'm sure someone out there still uses a PM or PM company for onesie/twosie type deals. This is more what I'm looking for, not the guy who manages your 96 unit apartment building or condo complex.

We pay our current property manager 6.55% of collected rents. Why such an odd number? It was calculated from an agreed to "flat fee" based on an anticipated rent amount.

If we ever close on this Moreno Valley property, we have a PM lined up that charges 9% of collected rent.

I always paid 8% in the past (many charge 10%). Now I pay nothing because I fired his butt! No matter how good I thought they were at the start, they never seem to continue that streak. Unfortunate, but a reality.

Medium be logoWill Barnard, Barnard Enterprises, Inc. | http://www.barnardenterprises.com

We were paying 10% of gross rents.

I agree with Will. Great in the begining but then it goes downhill.

They don't fill vacancies fast enough and the expenses are double what they should be.

In the end you will break even or lose money, at least in my experience.

Chris

I have several property managers for properties in many cities and we pay from 7-10% of gross rents and placement fees generally. We also cap the amount they are allowed to spend on repairs without asking us about it first.

Medium realstarter2Bryan Hancock MBA, RealStarter | [email protected] | (512) 827‑9638 | https://www.realstarter.co/Home/BH

Originally posted by Bryan Hancock:
We also cap the amount they are allowed to spend on repairs without asking us about it first.
I did that as well and went even further to stipulate that ANY expenses needed my approval before hand and required a minimum of 2 quotes.

Medium be logoWill Barnard, Barnard Enterprises, Inc. | http://www.barnardenterprises.com

I have a handyman manage my properties and I am paying him 6.66% (based on flat fee).

Sharad M., Max Properties, LLC | [email protected] | 773‑977‑9115 | http://www.MaxPropertiesLLC.com

Originally posted by Max I:
I have a handyman manage my properties and I am paying him 6.66% (based on flat fee).

Sounds like he's managing the occasional repair, though (the day-to-day tenant stuff), and not the collections, marketing, and leases, etc. Correct?

He manages the repair, day to day tenant stuff. I have my own lease that I use. I haven't signed any agreement with him, but I have told all my tenants to call him if there are any issues and then he calls me.

He will be showing my places to prospective tenants, getting them moved-in/out, etc.

Any issues with having my handyman manage my properties?

Sharad M., Max Properties, LLC | [email protected] | 773‑977‑9115 | http://www.MaxPropertiesLLC.com

My project manager is also my property manager (for now). He gets $1000 per property per year, which averages to about 10-11% of gross rents.

Medium lishproplogoJ Scott, Lish Properties, LLC | [email protected] | http://www.123flip.com

J Scott-So do you plan to get a professional property manager in future and it's a temporary arrangement with your project manager? Would you consider your project manager as your property manager on a full-time long-term basis?

Sharad M., Max Properties, LLC | [email protected] | 773‑977‑9115 | http://www.MaxPropertiesLLC.com

Originally posted by Max I:
...
Any issues with having my handyman manage my properties?

In some areas, a property manager is required to have a real estate license. I believe there are some exemptions to this such as employees (like buildings with lots of units under one roof). A property owner can always serve as property manager of course.

Originally posted by Max I:
J Scott-So do you plan to get a professional property manager in future and it's a temporary arrangement with your project manager? Would you consider your project manager as your property manager on a full-time long-term basis?

As soon as we have too many rental properties (or flip properties) that my project manager can't handle both jobs, I will hire out the property management to someone else.

The goal is that by the time I need to hire a PM company, I'll have enough rentals that I can just hire another part-time person to manage them all, as that will provide more control than a larger company where I don't have constant communication.

Medium lishproplogoJ Scott, Lish Properties, LLC | [email protected] | http://www.123flip.com

To summarize- it sounds like people pay between 6.55% and 11% to their PM and are generally unhappy with the level of service received.

Correct?

Sounds about right. 11% is very high and would likely only be competitive in war zone type areas with a heavy management time component.

I would look for around 8% or so if I was looking for new management on SFRs or small complexes.

Medium realstarter2Bryan Hancock MBA, RealStarter | [email protected] | (512) 827‑9638 | https://www.realstarter.co/Home/BH

Originally posted by Jake Kucheck:
To summarize- it sounds like people pay between 6.55% and 11% to their PM and are generally unhappy with the level of service received.

Correct?

I was under the impression that a lot of the professional companies also charged other fees, like taking 50% of a month's gross rent each time they place a tenant, a flat fee for managing repairs, etc.

Is this not the case with you guys?

Medium lishproplogoJ Scott, Lish Properties, LLC | [email protected] | http://www.123flip.com

I pay mine $50 per unit, per month. Average rent for me is about $550, so her percentage is actually a bit higher around 11%. Some of my units are in a bit rougher areas, so I can justify her fee because of the job she does. She handles day to day tenant issues, rent collection, tenant placement, basic property maintenance, and eviction proceedings, if necessary.

She does also take a $150 finders fee on the first months rent for each tenant she places. She does not charge any fee for months that a tenant does not pay (awaiting eviction) or the unit is vacant.

Sean H., STH Landholdings, LLC

Orange County, CA Property Manager - 6%
Los Angeles County, CA Property Manager - 8%
Tulare County, CA Property Manger $50 per unit (when rented)
Fresno County, CA Property Manager - 6%
Dallas/Fort Worth Property Manager - 7%
Phoenix, AZ Property Manager - 7%
Durango, CO Property Manager - 8%
Tulsa, OK Property Manager - 7%

The companies that charge me 8% manage only one property, the rest manage multiple properties, giving me more negotiating room.

Property Management Companies can go bad, so stay on top of them. They can be good for ten years and then go south, just be ready to FIRE them immediately. I fired one we had for over 15 years.

I also make regular calls on them, via phone, email, certified mail and the occasional "WALK IN" to their office. I keep them on their toes!!

Originally posted by Sean H.:
...

She does also take a $150 finders fee on the first months rent for each tenant she places. ...

You should try to move that finders fee to a higher numbered month - that way, if the tenant is a dud from the start, they don't get that reward; you'll see less "churn" through sub-quality tenants IMO.

Originally posted by J Scott:
I was under the impression that a lot of the professional companies also charged other fees, like taking 50% of a month's gross rent each time they place a tenant, a flat fee for managing repairs, etc.

Is this not the case with you guys?

Not exactly. Our current PM never charges us for placing a tenant. Then again, he made a commission when we bought the property through him, so his palm has been pre-greased. He does offer $500 to any broker who brings us a tenant, but we've haven't had to pay that yet.

The PM we're going to use on our next property (if we ever close on it) charges a flat $295 for tenant placement. He's been a great help so far and still hasn't made a penny.

I manage most properties myself. I live 6.5 hours from my properties and require tenants to deposit rent into my account at the bank. for properties that are tough I pay a manager 10% to chase the rents. If any repairs are needed then I take care of them myself. I have a good team of contractors so I dont need to pay markup.

If anyone know of good property manager in Wisconsin or Illinois surronding areA , pls
let me know

Seems to me every time I read a thread like this that if someone setup a good prop management company they could have many potential clients.

What might someone pay for near hassle free management of their properties? I have managed my own so far, but will be looking in the near future for property management.

Speaking as a property manager I will add some food for thought. Always try and bargain when selecting one. One key point to work off of is how difficult your property will be and how much work it will take. If you have a great single famil in good part oftown the manager more than likely will just be depositing their check and sending you one, easy work for 50 bucks to 75 bucks a month. Keep in mind maintenance is billed separately this is just in the management side. If you have a property in a tougher part of town where dealing with tenant payments and often lease violations will occur be prepared to pay a higher percentage, it's inherently more difficult to manage and more time involved....just my two cents

8% of collected rent not the contract amount.
50% of first months rent for placement.
The norm in West Michigan is 10-12%. obviously volume talks. You are asking about apartments....my guess is 6% on an apartment that size.
Usually 0 markup on repairs for apt complexes. Single family 10-15% add on for service call is normal.