Pay for onsite manager

[Ron Fiscus]

Hello,

I would like to hear any creative ways to pay an onsite manager.  I hear a common way of paying anywhere from 5% to 10% of gross rents, but I'm not sure that is how I want to do this.  I believe in and want to compensating well, but I want to compensate on performance.  I was thinking on maybe a very small percent maybe 1 or 2 percent of gross rents, but than doing a very large percent of the positive cash flow.  Any thoughts or other effective ways anyone has been paying an onsite manager?

Thank you,

Ron  

[Ed Emmons]

It has a lot to do with how big the property is that they will be taking care of. Sometimes they can’t control the cash flow because so much depends on the property itself. If they can keep it rented with good quality tenants then they effectively have done a good job and there is only so much they can do to cut expenses. If they go really cheap on things you may lose in the long run do to deferred maintenance.