In the case that you have your own Property Management entity set-up to service your own rental SFR properties. What is the best rate to charge yourself? Same as any outsource company (i.e. 8%-10%) or do you charge less than the market rate?
Why would you charge yourself a mgmt fee? If your not going to run a normal mgmt company then I dont see the point. If your trying to create expenses for yourself through an LLC that is your property mgmt company, I personally think it is pointless to do this. To form a company, Pay yearly LLC renewal fees and also file tax returns, I dont see how this is worth it unless I am missing something.
Property management in my area is 10%. I believe you should charge yourself 10%, if it's norm in your area because you will have to work and spend time to perform it and time is money.
In Illinois, you don't have to file separate taxes for LLC, if it's only one member. Yes, it's just fine to have your LLC and pay yourself. LLC is great way to own real estate, especially series LLC.
Thank you @Curt Davis , I'm looking to understand the best and right way to structure your own entities (SFR properties and the property management co.).
Thank you @James Syed
For SFH or scattered sites, it's usually 8-10%, sometimes 1st month rent or half of 1st months rent
For one-site apartments, it's usually 4% plus all expenses, including their payroll
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing