Pay as you go property management

[Nick Fegley]

Good afternoon, I'm writing to get your opinion on a new property manager relationship I have. A friend of mine retired from his military career and became a real estate agent. Up until this point I have self managed my house with no problems from a few states away, however I had met the tenants and got them set up in the house before I left. When the tenants in my house told me they'd be leaving last spring, I reached out to my fri me for advice, and it's morphed into him getting tenants in there and receiving the phone calls from tenants and then calling me to come up with a solution. I like having control of everything that's involved with managing my place, but am so thankful he is physically there to keep an eye on the property. Every time I bring up paying him he says that we can do a pay as you go because he doesn't think I'll get my money's worth with paying him or someone else 10% a month, I agree. Besides his own places, this is his first time managing a property. I think he's waiting on me to propose a fare payment plan. Do you have any suggestion on a payment plan that I can present to him? Here's what I was thinking; Phone call from tenant: $50 Site visit: $60/hr to include driving time Setting up services for work order: $75 Please be brutally honest, I want to be fare Thanks, Nick

[Matt K.]

That doesn't make sense to me.... and here's why:

Marketing, are you going to do that? Chances are (even with craigslist,zillow, etc) that you'll either have people wanting to check it out or at random times OR you're going to need a open house (or multiple). Let's say you have 2 open houses, 2 hrs long, and 1hr there/back. That's 8hrs x 60/hr = 480.

Now you have to sign the lease, keys, sec deposit. Let's figure 60/hr and 2 hrs (1 hr meeting 1 hr drive time). 60x2=120

Now the tennant that you had to market to, you had to screen, you did basically all but show the house to... they are late on rent. Let's say you are traveling and can't call... so he calls. 50/hr= 50

You're over 600 before you even have lease in place and you've done decent amount of work yourself....

Who's going to collect rent? Are you going to have someone send you a check, that's slow since you aren't local. They going to do direct deposit only, that will make it harder to market and cost you more open houses.

What happens when they stop paying and you have to evict them, do you have legal options that you are going to use, what are your relationships with the laywers attorneys. 

I think you must determine what your time is worth, to me it seems like you understand the value of someone else time but not your own. You could easily have a PM take care of it and if a big thing came up then you should review the bid(s) and approve. They probably would even let you pick your own vendor if you wanted... A PM should have better connections with local contractors, a better pool of candidates, and better pool of resources. They should take care of pretty much everything, you take care of the major items.