What should I charge for Property Management?

Question

This is privately arranged property management.  I am not a property management company.  A friend has offered to pay me to manage a house he owns in the Greater Hartford area.  I have not see the house yet.  Here are the details thus far:

There are 4 bedrooms.  He thinks they can rent each room out for $800 for a total of $3200/month

He has offered 10% for me to manage the renting of the rooms to the tenants and to take care of the lawn and snow.

This initially sounds low to me.  From my research here on BP, the average is 10% plus one month's rent ($800) every time I would have to find a tenant (does this mean he would pay me $3200 to find the initial tenants?)

Also, most property managers dont actually do the lawn and snow, correct?  They coordinate with subcontractors to take care of the lawn and snow, right?

Just trying to figure out what I should be negotiating for.  Thanks in advance!

John

Nathan Gesner · Answer

A professional charges 10% plus a month's rent for the leasing fee. With that comes knowledge of the law, experience, skilled screening and selection, established policies and procedures that prevent problems or nip them in the bud, professional marketing, and so much more. You have no experience, no training, no special skills.

Why should your friend pay you the same amount he would pay a professional? Why would you think you are worth the same as a professional?

I think your friend should hire a pro. If you manage it and screw something up, you'll cost him a lot of money and you'll lose the friendship.

Drew Sygit · Answer

@John Sigs  a couple things to add to what's already been posted:

1) Appears you need to be properly licensed to manage properties you don't own:https://www.allpropertymanagement.com/resources/property-man...

2) Renting-by-Room has so many headaches, 10% of the rents is a pretty low amount. Usually it's 15-25%.

Chris Rich · Answer

Now, it can be done, but if you aren't even sure of what the industry costs are for PM services, I highly doubt you are currently skilled enough in the area to risk doing it. I would be very careful if you move forward and do it because anything that goes wrong is going to fall back on you and if you do not have a management agreement in place you could be opening yourself up to lawsuit if you fail to deliver on the expected services.

What should I charge for Property Management?

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