How much should a property manager be paid?

Question

I am wanting to know how everyone decides how much to pay there property managers;is it a percentage based on the number of units? Also, what is the average percentage everyone pays management companies? Just needing more information on the pay of managment companies or single property managers.

Thanks!

Calvin Ozanick · Answer

Our company charges a flat 10% fee of monthly rent. We do not charge extra for any services. We will handle rent collection, maintenance calls, coordinating repairs with contractors, annual inspections, monthly owner statements and direct deposit in client accounts. All of this is something that is encompassed by that 10% charge. We find it very unreasonable to charge to fill a unit as it is simply our job to do so.

Caleb Heimsoth · Answer

@Tavish Flynn. This is almost entirely market dependent.  Overall I like 8 percent and 1 month rent on lease up or less.

Michael T. · Answer

Tavish,

Similar to other replies it will range on the market, however, 6-10% is very normal and I'm definitely willing to pay 10% if they property manager does a good job.

Unfortunately, sometimes you don't learn how good of a job the property manager is doing until they've actually started managing the property.

Obviously, there are numerous connections through BP that will help you find the right property manager for your specific market.

R. Elle Berry · Answer

Hi Tavish,

Standand or average is 10% per month depending on where you live. I've seen California to be higher but usually most states are 10% and less for multiple properties 7-8%. Hope that helps.

R. Elle Berry · Answer

Hello. Yes average management fee is 10% of the collected rent and leasing fees are equal to one month rent. Discounts usually for multiple properties turned-over to a management company / brokerage, ranging 7% - 8%. The start-up cost or "downpayment" can range equal to one month rent or more. Definitely depend on the agency, more companies are negotiable nowadays. Evictions can cost $100 or more for attendance fees not the legal, filing fees or writ. Lastly, management companies usually top-off repair invoices by 10% 20%. Definitely expect to pay extra for repairs and renovations.

For any additional questions feel free to message me, I'm very knowledgeable about the business. Licensed Ohio realtor as well. Thank you!

Joel Wilmoth · Answer

Absolutely, market dependent and also company specific.  Some companies offer different plan options that can be appealing based on what services you really need.  Just be sure you understand what the fees charged include.  6% from one manager may not include the same services as 10% from another and you will find yourself being billed for additional services that make your all-in cost 12%.  There are many different services in management and it is prudent to dig deeper than just the "what do you pay" question.

Ryan Rominger · Answer

Hi @Craig Bellot,

I actually operate a property management company in Indianapolis, and I work with a lot of investors.

We charge 10% of the monthly rent as a property management fee, and our leasing commission is equal to the first month's rent.

I am also a licensed real estate broker and I have had a lot of success helping investors (both local and out-of-state) buy investment properties and lease/resell them. Let me know if there is anything else I can do to help, and good luck!

Craig Bellot · Answer

Tavish,

If your long-term goal is to invest in more properties it is worth it to invest in a solid property manager.  Your time as an investor is infinitely better spent analyzing markets and deals. You want to move up the 80/20 leverage curve from technician to investor/entrepreneur.

In Bridgeport, CT and Texas the investment is about 10% of rents collected which frees you from taking resident phone calls, coordinating maintenance, leasing vacancies, accounting P&L's, conducting inspections and making property payments.

Craig

Paul Choi · Answer

Agree with Jaysen.

I've seen 6%-10% of gross rents plus $350 flat fee per new lease signed.  But it all depends on manager to manager of course.

How much should a property manager be paid?

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