Paying Property Manager from NOI, instead of gross...

[Marc C.]

Has anyone ever had a property manager accept a percentage of the NET vs. the gross? In that way, they are encouraged to keep expenses under control...something they usually have a problem with. (My current manager is proposing 12% of the gross, including paying for the expenses of a part-time on-sight manager. Seems really high to me.)

So, what about, beginning of the year, let's see them create a 2017 budget for the property, then STICK to it, and get paid from the NOI.

Anyone ever tried that?

[Marc C.]

Not sure I would want a PM as equity partner...too hard to fire. As for repairs eating up NOI, they are property managers: They should be able to build you a pretty decent budget for next year that shows what repairs will likely run, based on the other properties they operate.