After enjoying all the info on this site for a while, I am posting my first question. I am searching for my first multi-family property. All my ducks are in a row and now I am collecting info on property management companies. Since this is a side business for me, a PM is a must. I have read a lot of threads on this site regarding PMs and I wanted to run these numbers by you all. A friend of mine has two properties and he speaks extremely highly of his PM. Here are his fees:
Those fees are in line with what I’m finding. Anything less than 10%/month to manage is pretty good and if you have a recommendation from a friend you trust, that’s worth a lot.
Hey,
I would add, quality means more than price. If you have poor management, then you will lose money no matter how cheap the manager is. If you have pay a lot for good management, then you simply have to find a deal that allows you to make the return you want above the expense of management. In multis, I don’t think there is anything as important as management, IMHO.
I like the “keep it in the family” approche if you have a spouce let him/her manage the properties, and pay them the same thing. just an extra 2 cents.
a full month on the front end is a bit steep. My question would be immediately “how good is your pipeline” (i.e. flow of potential teants calling your office looking for a place) and 2nd how long have you been in business and how many tenants do you screen in a average month.
you will be payig top dollar for placement so you need a PM that can get people signed up to move-in BEFORE the previosu tenants moves out plus has excellent screening epxerience to minimize the possibility of getting deadbeat teants.
Its a cost benefit analysis-----vacancy and deadbeat will absolutely kill you rental biz. If you can minimize thtose with a good prop. mgmt, then do it.
AAK is right - IT IS ALL ABOUT THE NUMBERS!!! So, the question is not how much a property manager costs, the question is whether or not you can make a profit considering ALL the expenses. If you look at realistic numbers, I don’t think that you can turn a significant profit using paid property management, paid maintenance, etc. It just doesn’t work. Why not post the numbers and let’s take a look at them.