Topic of Interest: Wide discrepancy between PM company fees

Managing Your Property
3yFollow

Topic of Interest: Wide discrepancy between PM company fees

William C.
Member since 2021 · 87 posts · 41 votes

We have a small portfolio of rental properties. All are SFH. The locations are spread out in the states of: Florida, Oregon, Nevada. We employ property management companies for all of them. We have noticed a WIDE discrepancy between property management fees in these three states. Florida (close to Sarasota) is the highest. See below for a summary:

Florida: On-Going Monthly = 10% of Each Month. New Lease = 50% of 1st Month. Lease Renewal = 25% of 1st Month.

Oregon: On-Going Monthly = 7% of Each Month (no other fees)

Nevada: On-Going Monthly 8-10% of Each Month (no other fees)

Market dynamics allow each PM company to charge whatever the market would bare. No complaints about that. If we do not like the service or prices, we are free to move on. We get that. Anyone else out there with similar situations and such large discrepancies from property to property?

2Reply
13 views

4 Replies

Jump to latestLatest
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @William C. two thoughts come to mind:

    1) What are the average rents in each of those locations? 
    Affects monthly income for a PMC.

    2) What are the headaches of each location?
    Florida has humid climate & hurricanes. Both of those require more preventive maintenance hours from a PMC to properly handle.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    0Reply
  • William C.
    OP
    Member since 2021 · 87 posts · 41 votes
    3y
    Quote from @Drew Sygit:

    @William C. two thoughts come to mind:

    1) What are the average rents in each of those locations? 
    Affects monthly income for a PMC.

    2) What are the headaches of each location?
    Florida has humid climate & hurricanes. Both of those require more preventive maintenance hours from a PMC to properly handle.


    Cannot say I know the overall average rent for each location. I do know the average rents for the properties that we own. All are 3+ bed, 2+ bath, SFH, in A or B class neighborhoods. Florida = $2650, Oregon = $2700, Nevada = $2800. You are correct that Florida has the lower average rent when compared with the other 2 states.

    Agree that of all the states, the Florida properties tend to have more issues. In a normal year the Florida properties average 5 to 6 service calls. The other states are more in the 3-4 range.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @William C.:

    This is not unusual. There's a lot of variety based on state/city laws, size of the company, average rent rates, and other factors.

    The Oregon company charging 7% with no other fees is probably providing poor services and unlikely to be financially successful as a company. Or they have other fees you haven't told us about. Even 10% with no other fees can be a losing business.

    I know a PM that has a company in Atlanta and another in northern Florida. Same business, two different states, and his fees are quite different because of the laws or what the market allows/requires.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    0Reply
  • William C.
    OP
    Member since 2021 · 87 posts · 41 votes
    3y
    Quote from @Nathan Gesner:
    Quote from @William C.:

    This is not unusual. There's a lot of variety based on state/city laws, size of the company, average rent rates, and other factors.

    The Oregon company charging 7% with no other fees is probably providing poor services and unlikely to be financially successful as a company. Or they have other fees you haven't told us about. Even 10% with no other fees can be a losing business.

    I know a PM that has a company in Atlanta and another in northern Florida. Same business, two different states, and his fees are quite different because of the laws or what the market allows/requires.


     Thank you for the context. I can say that the outfit in Oregon that works with us for 7%... they have a done a good job for us up to this point. I do not know enough about their balance sheet to speak on their level of financial success however. Same story about the Nevada company at 10%.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free