Property Management Fees

[Mike W.]

I'm purchasing a multi-family (2 unit) home out-of-state and working a property management company that will act as dual agent and the property manager post purchase. Where do I have opportunities to negotiate a better rate? Rent on the property will be approx $1200 per mo.

- For small multi-unit they charge a management fee of $150 or 10% of the rent per month, whichever is greater. 

- They collect a fee of one months rent upon renting the home, $250 upon the signing of a 12 month renewal commitment from an existing tenant.

[Robert Gilstrap]

I'm always blown away at the fact when investors are looking to hire a professional to do something they want to nickel and dime the process. So lets see...$1200/mo in rent and 10% is too much so let's try for 8% for a whopping $24/mo savings. How much do you pay someone to cut grass at a property per month? Hint: it's more than $120.00

So handing over one of your most valuable assets to someone whom you want stellar service from, you expect them to be professionally competent and you expect to have them look out for your best interests but you're worried about $24.

Price should be the last consideration when hiring a manager or any professional. A good manager will never cost you a penny.