Turnkey fees
Hi, I am looking at properties in Memphis, TN and/or Middletown OH (based on recommendations of reputable Turnkey operators: MidSouthHomeBuyers and Missy McCall.
My first question: are both operators as reputable as I have heard?
My second question relates to fees: I calculated the annual equivalent of
- move-in fee (1/2 of rent)
- annual maintenance of A/C & furnace: $85
- management fee 10%
- lease renewal fee $200 (every year)
- rehab fee (when tenant leaves) $600
- vacancy (1 month / every 1.5 yrs)
- 10% repair accrual
After all these fees, my Cash-on-Cash return seems to be 5%, not the 15% top line that just looks at the monthly rent and mortgage payment. Am I being too conservative? Are the fees too high? One point the MidSouth person told me is they don't mark up materials like other operators. This may be an important point - I could really get hammered if I don't know the cost of hammers in TN.
I welcome all thoughts/suggestions/advice.
Thank you.
-Alex