When is an on-site manger is needed for Apartments?

[Jonathan Johnson]

Hello BP,

I'm looking at a 100 unit purchase of 2 buildings. One of the opportunities I see in the apartment is they have a lot of staff.

The management on payroll is as follows: Maintenance at $19.50/hr; Part-time maintenance at 11.75/hr; bookkeeper/accountant at $20/hr; and Property Manager at $30/hr which per year is $40,560, $12,220 (20hr/week), $27,040, and $62,400 respectively. This equals about $143,000 payroll expense per year.

If I just outsource a property management company that charges 10% of the rent, I could theoretically decrease expenses by 43%. 

But my question is, do I need an on-site maintenance person to take care of the properties? They are both 5-story buildings about 60 years old. One has 60 units, the other has 40. Over all they are mostly One-bed rooms (65) and efficiency (9). The Property management company said they have a list of contractors/maintenance/repair men that they could send out as problems arise. Anyone have personal experience doing either?

[Omar Ruiz]

Yes you'll need 2 onsite maintenance; 1 guy will get overwhelmed, especially on older buildingsister. The payroll is high at $1400/door. Should be closer to  $900- $1000. 10% for management of 100 units is high. Should be 4-5%.

Good luck