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Updated almost 8 years ago on . Most recent reply
My $8000 problem. Do agents really deserve $200+/hr
I have a problem with paying people by percentage rather than pay per hour.
For example, nearly every single property manager charges a percentage of the rent 6% to 10% of the monthly rent for property management fees.
However, if a property rents for $2000/month vs. $1000/month - the property manager makes double! But is it double the work for the property manager? No way. In fact, it may take more work to manage a tenant/home that pays $1000/month versus a tenant that pays $2000/month.
I finally found a property manager who charges a flat fee of $75/month!! So instead of paying $200/month (10% of $2000/month), I saved $125/month.
Now, let's translate that to the lease up fee. It's the EXACT same problem.
If something rents for $1000/month vs. $3000/month - does the agent/property manager do 3X the work to get $3000 for lease up or finding a tenant who is willing to pay $3000/month versus getting paid $1000 (1 months fee) for leasing up a tenant for $1000/month?
It's the same work but the agent/property manager is make 3X the amount of money.
So here is my specific problem. I have several properties that need to be leased up and I"m calculating that it will costs me around $8000 in lease up fees!!
These are higher end properties with fairly high rents.
So here are my calculations
$8000/3 properties = $2600/per property
How long do you think a property manager spends to advertise your property, do background checks, and finally lease it up for you? 10 hours total, 20 hours, 30 hours, 40 hours?
I want to SHOUT out to BP to property managers/agents.
How many HOURS do you think you typically spend in order to find a tenant for a property?
Paperwork = hours
Advertising = hours
Showings = hours
background check = hours
miscellaneous = hours
Most Popular Reply
![Mike Cumbie's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/399176/1621449131-avatar-mikec53.jpg?twic=v1/output=image/crop=2400x2400@0x0/cover=128x128&v=2)
I paid for some professional painters. They estimated the job would take 3 days with the both of them for $1200. I said go for it. They worked late and were done in 2 days. If we tallied up the hours I suppose they may have owed me some back but I was happy they did a Rockstar job, worked through their mealtimes and cut out early for a long weekend. I was happy as a clam and don't care what they made per hour. If they accomplished what they did in 10 minutes I would have paid it again.
When your mindset is "What is this person making per hour" you tend to find a lot of people that seem to take twice as long to accomplish a job half as good. I pay for a job done right, granted I don't often pay retail, but I don't watch any ones hours either.
- Mike Cumbie