All Forum Posts by: Stephen Schroeder

I agree that property owners will not want to be nickel and dimed, and thats how additional fees can come across as. And I am certainly not advocating for adding fees onto an expensive base rate. 

However, I do think that the more you can structure your rate structure towards a usage-based model, the better it is for everyone. If you do more hourly billing, you can then lower your base rate. Maybe you can get it down to 5%. If I am an owner with expensive rentals, I would be all over that, because on a flat rate model, why am I paying 2-3X more for the same service as lower rent property owners?

I think this model makes you more competitive, not less. There are PM companies currently benefitting from their most profitable customers at 10-15% of their rental income, and those customers are subsidizing their worst ones. But if I come in and say "Hey I'll charge you only 5% of your rental income but then i will bill you back for maintenance, leasing, admin work, etc" I bet they will go with me

Flat-rate billing based on rent makes zero sense for most property management companies.
You charge up to 15% of rent regardless of how much work a property requires? That might be simple and easy, but it doesn't seem smart and it's definitely not fair.

You’ve got one client renting $3,000/month units with stable tenants and another at $700/unit constantly turning over, submitting work orders, and dragging down your team’s time. Why should the harder client pay less than the easier ones. In some cases, your worst clients are probably costing you money.

I’m curious how others are handling this.

• Are you sticking with flat-rate and just eating the cost of problem clients?

• Have you found ways to implement hybrid models (low base + billable hours)?

• What are the biggest headaches in moving toward a more precise billing model?

• How do you explain it to owners in a way that makes sense?

Let’s hear it — especially if you disagree. I think this is one of the most important (and overlooked) levers in making a PM business profitable

Hi - Any third party property managers are to weigh in here?

I’m a newer property manager and trying to wrap my head around how to bill back expenses properly each month. I know some things are straightforward, like utilities that are metered, but for other costs especially labor and overhead (including those that work in the office), how do you decide what gets charged to which properties?

Do you use a specific formula? A spreadsheet? Some kind of software? I saw one post where someone mentioned using AppFolio’s bulk upload with a custom spreadsheet, but I imagine there are a lot of different ways people do this.

I feel like I might be overcomplicating things, so I’d love to hear how others handle it. Any tips or insights would be much appreciated!