Rental Property Investor · Boca Raton, FL · Member since 2020 · 27 posts · 12 votes
Hello. We rent out a SFH home in Los Angeles for $15k a month. The management fee is 10% of rent. It's steep considering the home is a multi million dollar home where very little goes wrong. Sometimes there is a minor leak or something but nothing major. And if it is major we replace it.
Now thinking of buying and renting out another $1M plus home.
We are new to this and obviously playing the asset accumulation game but still making some cash flow.
Does anyone with higher end SFH properties like this, just have a handyman on call and deal with issues that way? It seems there's a better way than paying 10%. But maybe I'm naïve.
That is an interesting one for sure. My only issue would be that if someone is paying $15,000 a month in rent they are likely expecting an immaculate place that has everything perfect with nothing ever going wrong. I don't think 10% is the answer but not sure 5% is either. I damn sure wouldn't put that investment in the hands of a handyman to be on call.
FWIW we manage one property for nearly $8000 a month but it's full of students, we charge 8%.
Maintenance requests are often the biggest pain for landlords. No matter how ideal the tenants are, appliances break, systems wear out, and little things will need attention. Labor and parts are expensive. Property managers build relationships with vendors. Often, these relationships provide a lower cost for maintenance and repair services that save you money and protect the value of your rental property.
A professional property manager saves you time from having to deal with tenant requests and complaints, or maintenance and repair issues. Most times the needs aren’t big or expensive, but the timing and urgency is. You don’t have to go out and find reputable vendors, your property manager has already done the work for you.
Property managers — specifically good ones — are worth their weight in gold. It is entirely possible for a truly great property manager to save or make investors more money than their initial fees. That said, the cost of property management is more of an investment than an expense.
It really depends on property, we charge anywhere from 5-10% to manage a property. Usually with higher based rents, we charge a lower fee, especially it’s it’s one property and not an apartment complex
That is an interesting one for sure. My only issue would be that if someone is paying $15,000 a month in rent they are likely expecting an immaculate place that has everything perfect with nothing ever going wrong. I don't think 10% is the answer but not sure 5% is either. I damn sure wouldn't put that investment in the hands of a handyman to be on call.
FWIW we manage one property for nearly $8000 a month but it's full of students, we charge 8%.
@Peter Tverdov is right, someone who chooses to rent at that level will have extremely high standards.
My question is, what does the 10% include? Do you pay for anything else? Are there separate leasing fees, maintenance service call fees, administrative fees, etc?