Average PM Fees in Phoenix Area

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Hi Arizona BP members. I am a multi family investor located in the Denver area but looking at some other markets in 2018. Curious what assumptions I should be using for property management fees in the metro Phoenix and suburban areas for multi family? Currently I use 9% of gross rental income in Denver. 

Hi Ed, funny that you're from Colorado. I just moved from Denver to Phoenix to run our branch out here. We're an investment brokerage but also run a mid-sized property management division. We manage roughly 3500 units in Colorado and Arizona. We charge 8% on the collected income of the property. Doesn't matter if its SFR or Multi. If you have a vacancy or a non-paying tenant - we do not get paid. For lease-up we charge 50% of one month's rent or $500 to lease up a $1000 unit. On average our residents stay 34 months so owners end up paying the lease up fee once every 3 years or so. When interviewing property management companies also ask them about maintenance surcharges or vendor management fees. We do not upcharge maintenance or repairs. If the invoice from the plumber is $150 to us it's $150 to you. If you need to comp rents in a neighborhood or area feel free to reach out. I have our actual rental rates for hundreds of units around the metro area. For vacancy estimates when modeling deals for clients we use 5%. Our actual vacancy this year is about 2.5%. In non-COVID years less than 2%.

8% is about average, although I've seen lower. At 8% you can expect to pay 1/2 first month's collected rent for a vacant turnover. Some offer a "full service" agreement for 10% that doesn't have re-leasing fees.

There's also monthly fixed cost plans around $65/month/unit that are collected regardless of if it's occupied or vacant.