Fair Property Management Percentages/Fees?

Question

What management fee % would you expect to pay if you had 60 units under management with one PM? Let's say the units are a mix of several smaller multifamily and a few single family houses.

What about fees? Marketing/Advertising for tenants (for posting vacancies on Craigslist, FB, other sites), leasing picture fees, fuel surcharges for maintenance visits, dispatch fees for 3rd party contractors? Which of these is your PM hitting you with, and which would you expect to have included in your monthly management % fee?

I'd love to hear from investors with several dozen units under management and/or experienced PM's with a decent sized business.

Thanks!

Owen Dashner · Answer

Well, one of the PM companies I use charges 8% for management fee, 1/2 month lease-up fees, $100 lease renewal fees, plus nickel and dime fees like all of the ones I mentioned (leasing picture fees, 10% dispatch fees (which aren't capped and really give me heartburn), fuel surcharges, advertising, etc.).  I feel like I am getting bled on small fees that add up to where my 8% management fee ends up being more like 14-15%.  Plus, shouldn't having 60 units mean a price break over what somebody with 1 or 5 units gets charged?  I like not being bothered and all on the day to day, but I just look through all of the monthly expenses and feel my blood pressure start to rise...

Jon Schoeller · Answer

We started with our PM at 10% and negotiated down to 8% as we have added more units. All of the other stuff you mentioned is included. We simply pay for the invoices of any repairs but they handle all of the management of that process. I think anywhere between 7% and 12% is standard but just like anything else you will usually get what you pay for. The point of a PM is never having to deal with the headache. Pay a competent PM a just above average fee and save yourself the headache.