Quote from @Mitchell Hammack:
I've always heard that you can expect to be anywhere from 8%-12% of rent for professional property management. I'm finding PMs who charge that as the base fee... but what I didn't expect is to see a high cost for finding new tenants (often 75% or 100%) and for renewing leases, (25%). Perhaps that's just the Tampa area but can anyone tell me if that's expected?
On a LTR property you expect to see $2000 a month in rent:
10% base fee: $200 / month ( $2400 / yr )
100% one month rent for finding new tenants: $2000
25% of one monthly rent lease renewal fee: $500
Total rental income: $24,000 / yr
I'm not privy to how often a tenant renews vs you have to find a new one but at assuming its every other year:
( 0.5 * $500 + 0.5 * 2000 = $1250 /yr)
That works out to $3650 per year in PM costs for a property that's bringing in $24,000 a year (also assuming no vacancy) or 15%.
I would say around 10% is pretty standard, but I think you are missing the big picture here! There are so many more ways to make more income outside of the above mentioned. Here are a few that are industry standard:
Application fees (where states allow to charge a premium)
Lease prep fee (tenant)
If owner wants more than 1 annual inspection per year, charge a fee
Late fees (tenant)
Pet fees (They have no issues paying for thier babies)
Maintenance fees....the list goes on and on
There's a guy based out of GA that will coach you. You can check him out here https://www.propertymanagerassist.com/
Give yourself a raise! Problem is, people learn these new ways to make more money, but they are afraid of implementing.
Best,
Brad
