Property Manager Charges 10% markup for all service calls

Chatsworth, CA · Member since 2016 · 190 posts · 224 votes

My property manager charges 10% markup fee for all service calls. So a $250 plumbing call turns into a $275 call. Does that sound crazy or normal? I already pay them a management fee, you'd think that would be included in that but maybe I'm wrong? I pay 7% management fee or $55 a door whichever is higher so my lower income/rental properties are actually at around 10-11% management fee. I would love to know your thoughts.

0 Reply

400 views

Most Popular Reply

Tim JacobPro Member

Real Estate Agent · Baltimore, MD · Member since 2016 · 520 posts · 379 votes

It helps the property manager safeguard themself against an owner who did a bad brrr to save money then think they should have the property manager basically be a gc for the 20% of work done wrong. A pm should not be spending days a month at your place for only 55 per month. So 10% is a fair rate as it can act as a gc fee as well.

6 Reply

See this reply in the discussion

32 Replies

Jump to latestLatest

Sort by

Allen Tracy
OP
Chatsworth, CA · Member since 2016 · 190 posts · 224 votes
5y
Thanks @Al D. for sharing all of your experience. I think the death by a thousand cuts is a great analogy.
0 Reply
Rick BassettBusiness Member
Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
5y
We charge 10% on repairs over $100, the owners generally authorize us to do repairs up to $250 without authorization unless it is a health and safety issue. We screen all tenant requests and do not grant all of them, long-term we'd rather keep the owner as a client than having a steady stream of tenant to-do list items.
We do have occasions when an owner wants to manage a significant repair or upgrade on their own (like a roof or HVAC replacement). If we aren't involved, at all, then we waive the 10% fee but if we get pulled in any capacity then it gets charged.
We will not manage or coordinate service for home warranty contracts. If an owner wants to self-manage those then we waive the 10% fee but if we get pulled in any capacity (including arranging appointments) then it gets charged.
475-900-3100
Bassett Property Management5108 Reviews
Website View Page
2 Reply
Jon Westrom
Property Manager · Fort Worth, TX · Member since 2014 · 77 posts · 29 votes
2mo
Ten percent on top of every service call adds up fast, especially when you're on a fixed management fee already. In 30 years of managing single-family homes in Fort Worth, I've never charged a markup on maintenance... and I never will. My owners see every invoice at actual cost. The markup model creates a conflict of interest — suddenly your manager has a financial incentive to call a vendor instead of solving a problem another way. Ask yourself: would you take a part-time job where your boss skimmed 10% off every dollar you spent? That's what your PM is doing here.
0 Reply
- Drew SygitBusiness Member
  Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
  1mo
  Quote from @Jon Westrom:
  
  Ten percent on top of every service call adds up fast, especially when you're on a fixed management fee already. In 30 years of managing single-family homes in Fort Worth, I've never charged a markup on maintenance... and I never will. My owners see every invoice at actual cost. The markup model creates a conflict of interest — suddenly your manager has a financial incentive to call a vendor instead of solving a problem another way. Ask yourself: would you take a part-time job where your boss skimmed 10% off every dollar you spent? That's what your PM is doing here.
  
  @Jon Westrom why do you continue to post to OLD Topics?
  
  Are you simply trying to boost your User Stats?
  
  You're wasting everyone's time by "re-activating" these old posts.
  
  Please adjust your Key Words Alerts - there are more than enough current topics to boost your User Stats!
  [email protected]248-209-6824
  Logical Property Management4.9451 Reviews
  Website View Page
  0 Reply
Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
2mo
Nearly 30 years in PM, never worked for a company that marked up vendor invoices. In later years, we had a provision allowing us to charge a coordination fee on major projects, but required owner approval beforehand. The idea was for fire jobs, or major renos, where more time was spent actually on site or with insurance/architects by the PM, but in practice we never did implement it. And, I never had an "assistant" PM. Separate accounting, and a single admin asst. for the whole office, yes, but I always did all marketing, showings, application processing, lease signing, movein/out inspections, handled maintenance requests, oversaw maintenance/repair projects, approved and coded all invoices before passing to accounting. And met with prospective new Clients, detailing our services and taking a look at their property before agreeing to accept.
0 Reply
Kyle MccawBusiness Member
Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
1mo
The 9% management fee is within the normal range in many markets, especially if it includes solid service.

The two things I'd look at more closely are the placement fee and the maintenance markup.

A $100 leasing fee seems unusually low. By the time a property is marketed, showings are coordinated, applicants are screened, the lease is prepared, and move-in is completed, there's a lot of work involved. I'd wonder how they're covering those costs without cutting corners somewhere else.

The 10% maintenance markup feels a bit outdated. Many professional managers today negotiate strong vendor pricing and either don't mark up repairs or charge a transparent coordination fee instead. I'd rather know I'm getting quality vendors, competitive pricing, and fast response times than worry about a hidden markup.

I'd focus less on the fee schedule and more on the total value. A property manager who minimizes vacancy, prices rents correctly, screens well, and protects your asset will usually make you far more money than the difference between an 8% and 10% management fee.
McCaw Property Management4.4902 Reviews
Website View Page
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.