I purchased a duplex last year which is currently a house hack. It has been quite the experience renovating, moving and becoming a landlord! Now, my boyfriend has been offered an amazing job opportunity and we will be moving out of state at the end of the year. I am definitely going to be keeping the duplex, as the income it will produce far outweighs the equity I have in it currently, but that now means I have to figure out property management from afar.
My current tenants are great and have expressed an interest in helping me with the property management. We are going to sit down and discuss it this weekend, but I would like to go into that conversation having an idea of what I am really going to need from them and what would be a reasonable price for it.
Does anyone have any experience with an arrangement like this with their tenants?
We did a pretty extensive renovation to the house- kitchens/baths gutted, new appliances, new HVAC, new plumbing, new windows/exterior doors and new lighting. I don't expect to have a ton of repair issues (of course I know there is always something!), the appliances/furnaces are still under warranty and I have people to call if I do have an issue (plumber, HVAC guy, electrician and a general handyman). Also, I plan on having the unit I am currently living in occupied by tenants before we move. I have a snowplow service set up for the winter, but I have been cutting the grass on my own this summer so that is something they could possibly take over.
I am thinking that I would do something with a small monthly rent credit (maybe $100 off?) and that would cover grass cutting in the summer and a certain amount of their time on a monthly basis if I needed them to let in/supervise the plumber or handyman. After that I would compensate them hourly if for some reason there were an excessive amount of things for them to handle during one month.
Does this sound reasonable or am I crazy for entertaining the idea? Would love some feedback!
what will be your combined gross rental income? if it is below $1000, then $100 is too much, if above a $1000 then i say offer it because it would be a good deal, most PM charge 10% of gross rents, but they will collect rent, pay bills, handle evictions and handle contractors if needed, so you will get more, are the tenants willing to do that, or would you still be doing that? will they show the other apartment any time and take phone calls from the other tenant at any time? if not then $100 may be too much to look over the property and let subs in. A lot of it is how much is it worth to you for the piece of mind to not handle those few things. you may want to consider a PM, and let them handle everything, this will take a lot off your plate.
Gross rent will be about $3600 combined. I wouldn't have them involved on the financial end at all. It really would be more of a watch the place, let subs in as needed, cut the grass in the summer and be the designated person my homeowner's insurance agent told me I would need if I would be living out of state. The only reason I am considering it is because my sister just moved as well and my parents are only home in the summer, so I really do need to have an emergency person who will be here. I am just not sure what reasonable compensation would be.
If you think it's expensive to hire a professional, try hiring an amateur.
I think you're making a mistake. You would have a tenant in charge of their own unit, which is a recipe for disaster, and they may completely suck at managing the neighboring unit. It wouldn't take much for this entire situation to go bad and end up costing you a lot.
If the two units rent for $2,000 a month then a property manager will cost around $2,400 a year. One bad tenant can cost you twice that in just a few months. Pay for a pro that can protect your investment and give you some peace of mind.