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Joe, Other/Just Looking in Los Angeles, CA

property manager companies

Asked by Joe, Los Angeles, CA Fri Apr 23, 2010

Is it a good idea to hire a property management company to take care of a tri-plex. What percent do they usually charge?

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I do it myself to save the 8% monthly and other fees that management companies charge. I've found that you can fix nearly any property problem yourself if you just watch youtube instructional videos. (Totally serious here folks). Add to this that most property management companies have a tendency to begin "skimming" and padding extra expenses in every month to absent owner's accounts and the owner's bottom line gets a bit leaner.

Do the numbers. If you have a building earning $3000 a month or $36000 a year, paying a property manager 8% is like $2880 per year. If you work 10 hours per month on each property (which is alot-this time figure does not include any maintenence work) then that time works out to $24 per hour. Is it worth $24 per hour to farm out?
Web Reference: http://www.skyminor.com
0 votes Thank Flag Link Tue Jul 13, 2010
Hi Joe,
It will take a lot of pressure off of you if you have a professional service taking care of your property. Each company charges a different amount so it's best to check with them directly and compare what each one is offering. It is usually a percentage of the rental fee .
0 votes Thank Flag Link Fri Apr 23, 2010
If you aren't familiar with the property management process or regulatory issues involved in property management, or don't want to spend time managing your properties, it's advisable to hire a management company. Typical fee is 10% of rents, but the rate is always negotiable, as are many features of a property management contract. For example, when you have a vacancy - who pays for advertising to attract new tenants? Do you want the manager to use any tenant screening criteria in addition to the manager's normal process? Do you require additional operating reports or notifications? (for example, I require a written report every time the manager receives a complaint or maintenance request from a tenant). If you decide to use one, interview several. Visit properties they manage to see how they are taken care of. Best of luck! John
0 votes Thank Flag Link Fri Apr 23, 2010
The best investment in rental property is a long-term committment to a rental business and only as good as the daily management of that property. The problems of rent collection, prolonged vacancy and physical condition of a small property are even more pronounced because one unresolved issue can consume the operation. Example: one vacancy is going to represent a huge vacancy factor. Property management doesn't seem like a big deal. It's literally lots of little things; things that are important but can be overlooked or postponed by an owner with other priorities. In addition, the 8-10% of the collected rent that is normally charged by companies that specialize in small rental properties is a relatively small cost for an additional buffer against the ongoing liability of fairhousing laws, landlord-tenant conflicts; not to mention FTB, IRS and other regulatory requirements. Neil Fjellestad
Web Reference: http://www.FBS-PM.com
0 votes Thank Flag Link Fri Apr 23, 2010
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