Construction Management Fee Question

[Michelle A Shriver]

If you have a third party managing / overseeing construction, CapEx improvements, larger repairs, etc. what is the fee (%?) you pay them for this oversight / management? Are there variables based on scope, cost, duration, etc? Do you have mins/maxs? Please note -- although this is separate from property management, IF your PM handles this for you in addition to traditional property management, is the fee you would pay them for this different than if it were a completely independent construction manager/overseer not already associated with the apartment complex? Thank you for your real world insight!

[Greg Kasmer]

Quote from @Joe Fish:

Quote from @Greg Kasmer:

Michelle - My property management companies offers oversight of a larger project/renovation for 10%. I'm ok with that as long as they "own" securing the subcontractors are regularly on-site and provide good communication back to me. Good Luck!

 @Greg Kasmer - is this percentage arrangement detailed in your property management agreement? On a related note, is it clear what would constitute a project/renovation vs. routine maintenance and is that spelled out in your agreement? Thanks!

 Joe - Funny you should ask, because I had the same question. I had a conversation with them about it and repairs/maintenance are typically when someone is living in the unit and one (1) issue needs to be addressed. If it's a "Unit Turnover" or a vacant unit that needs to be upgraded/renovated, then that's when the 10% fee would come into play. There is definitely a bit of a grey area so I'm going to continue to continue to clarify with them. Thanks!