Entry by Bryan Robertson

Real estate consulting and property management

  9 Comments

Hi everyone,

This is my first post here.  I wrote a post on Activerain yesterday about a concept I'm going to propose to my clients.  Instead of charging a typical 6% property management fee on a townhouse that will require little, if any, services, I'm going to charge my clients by the hour.

Depending on the property, condition, and tenants, this could be really good for both the landlord and the agent.  A difficult property would pay more and easy tenants would be a better value for the landlord.

How does this sound to all of you?

Bryan

9 Comments

Welcome to the Exchange - great first post!

I don't know much about property management fees, so I'll defer to others, but if it sounds like something that pays you fairly and will also be perceived as fair to the landlord, it sounds good to me.

My only thought to the negative is - as a landlord myself who manages my own properties - I wonder if I might prefer to have a fixed cost every month instead of a variable one...

It's possible that a fixed cost is more effective overall, especially with a large number of units and difficult tenants/buildings.  A hybrid model might work as well.  I proposed an hourly rate to my clients and they're thinking about it.  We'll see how it goes.

Hey Bryan - will you post the link to your blog at AR?

We have a property management division and charge very differently. I charge 2 mo rent if its just to be on the MLS and we find a tenant. If they want us to find a tenat plus do management (collect rent checks, arrange reprairs, etc) I charge 1 mo rent + 10% of each check collected, plus a list of a la carte services if needed.

We charge a one time fee of one month's rent up to $850 to locate tenants, screen and process leases, etc.  We charge a $90 a month managment fee for rental collection and stmt. processing, deposits etc.  We also charge $90 an hour for any other services we need to provide for the client, i.e. setting up and meeting with repair trades, maintenance etc.  We also charge a fee for rental renewals.  This works well for us and our clients love it.  

PJ, it would be helpful to know what state you are in.

As a matter of fact, could all those who have shared their property management guidelines add what state they work in?

"State of confusion"  LOL

Our rents here are a bit higher than most of the country.  The "norm" in Silicon Valley is to charge 5-7% of the rental contract (up to 1 year) as commission to get the tenant.  Property management fees are roughly the same paid on a monthly basis. 

What I proposed to my client is that I would charge them $150/hr to help with fielding calls for service, etc given that they would pay their own bills.  That was compared to $100/mo fixed rate.  Those fees are lower than the norm so it seemed like a good deal.  They're still thinking about it.

Here's a link to my blog on this topic:

http://activerain.com/blogsview/2712913/real-estate-consulting-and-property-management-the-perfect-blend-

This page contains a single entry by Bryan Robertson published on January 13, 2012 10:25 AM.

"Time is Money" blog at Active Rain was the previous entry in this blog.

Turning Marketing Strategy Into Action is the next entry in this blog.

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