Skip to content
Managing Your Property

User Stats

7
Posts
0
Votes
Jaime Mejia
  • Denver, CO
0
Votes |
7
Posts

How would you structure a live in property manager?

Jaime Mejia
  • Denver, CO
Posted Mar 7 2023, 17:00

Hey everyone, I have a sfr split like a vertical duplex. The basement has a separate entrance and is doing well on Airbnb. The rest of the home has 4 (potentially 5) bedrooms that I want to rent as individual rooms medium/long term. I have someone that has rented from me in the past and is interested in working out some type of live in property manager for the rooms and Airbnb including cleanings. How or what incentives would you offer this person in my scenario? Would you offer free rent? Half rent for managing the Airbnb? A referral fee for every person she found to fill a bedroom? I've never been in this place and hoping for ideas, personal experiences, advice on this situation to reach a fair agreement for both sides. Thanks in advance!

User Stats

2,323
Posts
1,566
Votes
Richard F.#1 Tenant Screening Contributor
  • Property Manager
  • Honolulu, HI
1,566
Votes |
2,323
Posts
Richard F.#1 Tenant Screening Contributor
  • Property Manager
  • Honolulu, HI
Replied Mar 7 2023, 19:04
Aloha,

Whether renting rooms, or talking about a live-on-site resident manager of a large complex, there are so many ways for this to go wrong. Inevitably, they will make friends with some residents, and enemies of others, both of which lead to problems such as Fair Housing violations when the friends get preferential treatment for repairs and rule violations; supplies and materials disappearing both on and off site; unauthorized repairs allowed or performed by the manager at your expense in time and materials; time that should be spent on your expected tasks that is spent visiting or "helping" their friends; buying extra materials that never make it to the property; taking advantage of residents charging them for "extra" tasks or "collecting" rent; the list goes on. I've seen and experienced every one of these and more over the years. You need rock solid checks and balances in this business. Shortcuts will cost you. Also, if you do NOT report your "incentives", you can have the IRS on you, and your "manager" could very well be considered an "employee", even if he trips up the stairs and knocks out his own teeth...showing YOUR room for rent.

User Stats

7,028
Posts
3,638
Votes
Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
3,638
Votes |
7,028
Posts
Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
Replied Mar 8 2023, 04:02

@Jaime Mejia NEER offer free rent!

Instead, have them sign an at market rent lease and then give them monthly credits for what they do.

This way, if they STOP perfoming or perform poorly, you just stop giving them credit and they have to find another way to pay their rent. If they don't pay, you can evict them!

Otherwise, if you sign a below market rent lease with them and they stop performing - what are you going to do?

Please send us any feedback via email, as we do not use the DM feature here.
Also, if you like our response, please don’t be shy about giving us a vote😊

Vacasa logo
Vacasa
|
Sponsored
We do the work. You get the ROI. We do it all for your vacation rental. All—marketing, pricing, guest requests, housekeeping & more.

User Stats

23
Posts
27
Votes
Alan Le
  • Realtor
  • Denver
27
Votes |
23
Posts
Alan Le
  • Realtor
  • Denver
Replied Mar 8 2023, 18:51

Hey Jaime -- one other consideration is that you are required to have a real estate license to manage rental properties that are not owned by you in the state of Colorado, (with STRs being an exception to this). But if you are leasing out your property otherwise, a license is required for management. Is this person a licensee with the state of CO? Most complaints filed with the real estate commission board are related to property management practices and having someone unlicensed managing your property could expose you to other liabilities and risks. 

That said, I agree with above points made already. I would charge a market rate for rent and have the agreement/compensation for management be something else separately. 

User Stats

324
Posts
321
Votes
Ben Rhodin
  • Realtor
  • Denver, CO
321
Votes |
324
Posts
Ben Rhodin
  • Realtor
  • Denver, CO
Replied Mar 13 2023, 08:23

Hey @Jaime Mejia, like many have already pointed out, this is a sticky situation in general. If you really wanted them to handle some of the duties of the properties, I would first off separate it entirely from the rent payments. As you will need to 1099 them, and keep track of their jobs. Then also understand what is a licensed duty, and unlicensed duty as far as the real estate commission is concerned. They will be able to handle everything as far as the STR, but leasing and the RBTR side will be iffy. If you just want them to be the eyes and ears of the property that's fine, but don't have them place tenants or anything.