The number one complaint I hear about managers isn’t that they do a bad job. It’s that they seem to cost to much.
Clients seem to begrudge their managers when a property has great tenants and is ticking along with no major repairs. There’s no real expenses. $1000 worth of rent comes in and the only deduction is the management fee. Usually I’m seeing 10-14% for decent single family property management.
Sure, it sucks when there’s no visible costs and you’re paying $100-140/month for the pleasure. But when the property goes vacant, think of how much time goes into getting the property re-rented.
- Receive notice
- Confirm vacating date
- Schedule out inspection
- Conduct out inspection
- Arrange repairs/renovations
- Supervise repairs/renovations
- Bill/invoice for repairs/renovations
- Arrange cleaning
- Supervise cleaning
- Bill/invoice for cleaning
- Generate/mail statement and cheque for tenant’s deposit
- Advertise rental (1-2 newspapers and 3-7 websites)
- Screen calls
- Arrange showings
- Evaluate applications
- Conduct credit checks and background checks
- Do move in
- Process damage deposit and first month’s rent
- Generate and provide statement to owner
Brent’s comment is every time a tenant turns over, it’s a cost of about $2,000. That’s both the costs above and the lost rent while it’s vacant. In the $1,000/month rental scenario, that suite has to keep running for over a year to make back what they just spent in time and hard costs.
Compare that to your lawyer who makes $800-1000 for a week’s work (most of which is done by assistants), or your Realtor who makes $5,000-10,000 per deal.
Property management is a nickel and dime business. It’s a hard industry to make money in and harder to do an exceptional job. You should hire the best people possible, overpay them and cut them some slack.
