What does your property management company charge you?

69 Replies

What does your Property Management company charge you? Do they mark up the invoice if something happens such as a rehab?
@Scott Rubzin worked with two different management companies -- one in NY, one in FL currently. Both management fees similar 8-10%. Neither upcharge on maintenance, but I'm sure some companies out there will try and get away with it.

Around 8%. No tenants, no pay.

@Sam Shueh any up-charge for maintenance for them to handle it ?

Most want keep a trust account for like 1K covering misc maintenance, Big ticket item I suggest you deal direct as few want to be your GC.

Try not get them collect rent directly. Have tenants Zelle to a trust or your own account.  There are a few collect rent from big apts and disappear.

@Scott Rubzin my property manager charges me 1st month rent (when she finds a tenant and also when the tenant renews the lease) she also charges 10% of the rent every month. My house that I acquired needed a lot of work but had a tenant in it. After acquiring the place, I had to replace the roof, and when tenant moved out there was a lot of damages so we had to hire a contractor to do almost a full blown renovation.,,.... she’s been great getting me quality contractors at a low cost..... and she’s asked me to directly pay them so I know she isn’t getting anything out of them and Minor little things I pay her, but I know she doesn’t have Mark-ups on them. She isn’t suppose to anyways.
@Jenna Lee This first months rent at release plus 10% makes management total 18.3% if you lose a tenant after a year on a 1k$/month unit... I don’t see how you can make this pencil with these fees. Unless your tenants last 5 years. But regardless there are plenty of residential managers working for 10% on single fam and 8% on mf so why would you settle for that. Seems more common on commercial props.
@Tony F. Oh Tom, I honestly haven’t heard of anything better. Do management companies usually not charge both?? I thought they did

Paying 8% all inclusive currently, obviously a good manager worth alot, but unless your debt is super low I don’t that making sense. 

@Scott Rubzin my pmc gets first month when they place someone, 8% generally with percentages off for direct deposit and email and/or receiving payments at the end of the month versus by the 8th, so you could get it as low as 6%. If they don’t collect, they don’t get paid, which is a nice built in incentive for them to do their jobs. I choose their retainer ($200 for me), and the tenant runs all repairs through them with final approval by me. They have a maintenance crew with 24/7 emergency. I also get monthly statements showing gains/losses and can easily access the information at my convenience. There were some issues in the beginning with their contractors cutting corners, but because I did an eyes on inspection, I caught it, and they made it right. Their prices have been very reasonable, and when I compare what I’m getting with horror stories I’ve heard about, they haven’t pissed me off enough to go through the hassle of switching.
Originally posted by @Jenna Lee :
my property manager charges me 1st month rent (when she finds a tenant and also when the tenant renews the lease) she also charges 10% of the rent every month. [...] and she’s asked me to directly pay them so I know she isn’t getting anything out of them and Minor little things I pay her, but I know she doesn’t have Mark-ups on them.

You're getting screwed!! I'm speaking from a different city, but I can't imagine Seattle is much different. I typically see 6%-12%, so the 10% fee is a little high, but not out of line, especially if she is doing a good job. Paying someone a full month rent for rental seems high unless they are very low rent places or extremely hard to fill. I've generally been quoted 50%-70% of one month rent with the rarity being 100%. However, since she is being paid 10% per rental, part of her job should be renting the unit so that she gets that 10% a month payment while the unit is filled. I can understand giving her a little extra, perhaps a few hundred dollars, but no way a full months rent. And another months rent on renewal is crazy! Get a local RE Agent to rent the place for you. You'll probably pay 60% and there is no lease renewal fee.

Never assume that just because you pay the contractor directly that she is not getting a cut. I inherited a situation where the numbers didn't click and I flat out asked the PM if they got any kickbacks or compensation from any of the companies they used. They laughed and assured me that they did not and would never do anything like that. Shortly after that I learned that a lot of the repairs were being run through companies that were owned by the PMs spouse using a different last name. We paid these "outside companies" for their work, never the PM directly. And you never know if the outside company is doing work on her place, but putting the bill under your address.

7.5 % and they are one of the best in town ( las vegas)

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@Scott Rubzin 10% on SFRs. 1/2 months rent for tenant replacement after year 1. $200 annual lease renewal. I don’t believe there are markups on repairs, but possibly a trip fee - all waived in year 1 under their in-house turnkey warranty.
@Jenna Lee thank you for your feedback. What state is the rental property in?
@Leanne J. So the property management company does not mark up for their services to handle a rehab? Or any maintenance issues?
@Maurice Smith any mark up or service fee for the property manager if there is a maintenance request or rehab for over seeing the job
Originally posted by @Scott Rubzin :
@Maurice Smith any mark up or service fee for the property manager if there is a maintenance request or rehab for over seeing the job

 to be honest i have not used them yet. just #1 on my list so far. I met with them in person the weekend of my inspection. they charge only 7.5% the name of the company ( golden west property management) reviews seem to be good for the most part. i was also considering ( triumph property management) the have real good reviews as well and charge 8%. Im actually going to give them a call monday 

Originally posted by @Sam Shueh :

Around 8%. No tenants, no pay.

 When there is a vacancy, do you handle all the utilities turning on and paying all the bills: water, sewer, gas, electricity, landscaping etc?

If your PM doesn't get paid when no Tenant then who is looking after the property? What if it's vandalized during the vacancy? Who's calling police, get it restored etc?

Originally posted by @Scott Rubzin :
@Leanne J. So the property management company does not mark up for their services to handle a rehab? Or any maintenance issues?

PM company get paid monthly for maintenance calls supervision. Rehab is a different story - if you don't pay them to supervise the rehab and they don't mark up on the contractors, are they really controlling the rehab? Or they are doing it for free? 

As of cost of PM: 10% or$100/month whichever higher and 1 month rent placement fees.

When an agent post listing for Rent on MLS, the co broker gets half of one month rent as their fees. Usually the listing broker gets 50%, too. If the broker has many agents working in rentals, agents get 30-50% of that listing fees.

So, let's say, your rent is $1K, then cobroker who found Tenant gets $500 and another $500 goes to the broker of PM company. The agent who listed your property for rent gets $200-250. That's why it's least desirable real estate business - PM.

Property management is the most sensitive point for the out of state investors. Most of them are unhappy with their PM.

That's why they are selling their investments in few years

Originally posted by @Account Closed :
Originally posted by @Maurice Smith:

7.5 % and they are one of the best in town ( las vegas)

 What?  If they really are good they are Fools to charge 7.5%.

Yep. Especially on 4plexes, which are about 8 times the work of a SFR or condo. Not exaggerating. Lol

I have never heard of a pM company that does not mark up maintenance they would go broke if they did not.

Agree PM would go broke if they did not mark up maintenance. From my research some as much as 25%. They would go broke if they were just replying totally on 8-10%

8% of rent, $300 commission to their realtor or any other realtor that finds tenant, $150 to renew a lease. Zero markup on repairs. (actually a discount is shown on invoices)  most Tennants have stayed more than 4 years (1-2 years at a time leases and then renew for 2-3 years or add market + $50/mo for MTM)

If you have less than 5 properties they ask you to take care of name changing utilities and Hoa or pay $5/mo per property, 5 or more it’s all covered if you wish. (I still handle so I know what’s going on. But I’ll have them take it over if I leave the state.)

Key properties in Las Vegas, been great to me for years and years. 

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