MTR property management

[Miguel Del Mazo]

My wife and I have been blessed to have 4 units that we own which we MTR and another unit that we arbitrage as an MTR. We got started during COVID. That has given us some insight into our local market (a small city of 100k in the South). In the process of growing, we've reached out to existing STRs and LTRs to see if anyone was willing to do another arbitrage deal as we save up for our next purchase. 

During this, we've made some friends with folks who, rather than allow us to rent their unit, would prefer that we manage their property for a fee. In our state, property management must be done by a licensed real estate agent. Neither of us are agents, but it would certainly be doable to get a license.

My question: what kind of fee structure would you be willing to pay to an MTR property manager, or if you are already an MTR property manager, what fees do you charge? LTR management in our area is usually 50%-100% of the first month's rent with an ongoing 8-12% of rent every month. STR rates can go as high as 30% of the booking. Both of those fee structures seems punitively high to me for the MTR model. I'd appreciate any insight from either the owner's or manager's perspective. Thanks.

[Drew Sygit]

@Miguel Del Mazo MANY investors who get involved in managing other investor's properties make the same mistake you are making - they SEVERELY underestimate the time it takes and UNDERPAY themselves!

With MTR, you are correct and the same rate as STR of 30% may be too high. Same with the 50-100% of one month of rent for Placement.

NOTE: STR doesn't charge for Placement - hence the 30% figure.

Recommend tying the MTR fee to the length of the stay - the shorter it is, the higher percentage you may want to charge. Also, don't foget to factor in charging for your ongoing time if the MTR guest requires assistance during their stay.