An 8 percent fee on a 14 room boarding house does not cover the actual hours required

26 month average tenure on rooms at 780 is the number I'd stare at longest. That's unusually sticky for this product and two residents already told you why. If the dinners go, does tenure go with them, and how many turnovers does that cost you at 350 each plus vacancy?

Reading this from the outside, 20 hours a month for 749 is the clearest illustration of why so few operators want to be the one doing the managing. But arbor's point cuts the other way for you, doesn't it? If the meals hold tenure, killing them makes the manager's job worse along with the owner's returns.

Seven of twelve paying weekly at the door is where I'd spend my energy before the fee argument. Two visits a week is roughly 8 to 10 of your 20 hours. If half of those residents move to a payment app or a money order mailed to a box, you've cut your hours meaningfully and the fee fight gets smaller. Some of them will be cash-only for real reasons and you can't push those, but I'd bet not all seven are.

Before the structure, a question. Whose license is it? If the boarding house license or permit is issued to the operator rather than the property in your state, then bringing in a new manager can be a filing event or even a re-inspection trigger, and that is a very different September from the one you are planning. The same change is treated as a formality in one city and as a full new application in another. Worth an email to the issuing office naming both you and the owner before either of you signs.

The meal part threw me. Is a boarding house with meals a different licensed thing than one without, in most places?

Juniper, sometimes yes. The classic definition of a boarding house includes meals and a rooming house does not, and some ordinances still carry that distinction with different requirements attached. Whether serving dinner three nights a week to residents triggers any food service permitting depends on your state and county health rules, and that is a question for the health department rather than for this room. Trellis, on the cook. The records are the smaller part of the exposure. The larger part is who she is contractually. Nine years, a set schedule, an owner-supplied kitchen, owner-supplied food, cash pay. If anyone ever looks at that arrangement, the classification question is not going to be a close call in the owner's favor, and no management company should want to be standing in the middle of it. Whether she is an employee is a determination for a professional who knows your state's tests, but I would make cleaning that up a condition of signing rather than a project for month four.

Simplest version: tell the owner you will manage the housing and you will not manage the kitchen. Meals stay, contracted properly, billed to him, outside your scope and outside your fee.

Your 45 an hour loaded is doing all the work in this post and nobody has questioned it, so it is worth questioning. Is that your fully burdened cost including the overhead you would carry anyway, or is it your target billing rate? If it is the second, the 8% is thin rather than under water, and that is a different negotiation. Run it the other way. 749 against 20 hours is 37 an hour of contribution. If your marginal cost to service this account is a coordinator at 22 all in plus mileage, you are making money at 8%, just not enough to be worth the risk profile. If you are the one doing all 20 hours personally and turning away other work, then 45 is real and the answer is walk or reprice. Separately, 95 per occupied room is 1,140 now and 1,330 at full, so you are at 12% at capacity. The owner will do that arithmetic in about four seconds. Have the answer ready: it is 12% because the product is 14 leases rather than one.

Sextant said the useful thing. Anyone who has run a service business knows the fee is a story, and the story here is the count of relationships. Pricing by door is the sound approach on everything, and rooms are doors. Fourteen residents means fourteen sets of expectations about the fridge. One addition. Put a floor in. Try 95 per occupied room with a minimum monthly of, say, 1,050. If occupancy craters to 8 rooms you are at 760 under your structure while working the hardest month of the year. Cairn's incentive-on-top idea plus a floor gets you paid in both directions.

The turnover fee needs clarifying: 350 per turnover, four to six a year, so 1,400 to 2,100. Is that on top of the cleaning contractor, or does it include the clean?

Vellum, it should be labor and coordination only, with the physical clean and any repairs billed separately at cost. Trellis said the contractor bills the owner direct, which is the right call.

Trellis, the ceiling problem I keep hitting is that accounts like this eat the owner's attention and mine at a rate no fee fixes. Twelve residents at 780 is a 112k gross asset. You're negotiating over the difference between 749 and 1,140, which is 4,700 a year, and the real question is whether this account crowds out two normal buildings. If your capacity is full, the correct fee isn't 12%, it's whatever makes you indifferent, and you may find out that number is 15% and he says no.

The line in this post that belongs in a written policy before anyone signs is the incident ten days in, where a resident stopped answering his door. Any management agreement on a property with shared kitchens should spell out who does the welfare check and how soon, and who makes the call to emergency services.

The dinners are a service line, and services priced at zero are hard to value until they're gone. Two residents naming it as the reason they stay means the owner is buying tenure with a cook's wages. Somebody should figure out what those three dinners cost a month, food plus her pay, and compare it against one turnover at 350 plus a month of vacancy at 780. My guess is the dinners are cheap by that comparison, which argues for keeping them and fixing the paperwork rather than cutting them.

Read the existing agreement the retiring manager signed before drafting your own, if the owner will show it to you. Eleven years of amendments will tell you exactly which fights he has already had. Several things belong in your draft that the post does not mention. An indemnity that separates you from anything predating your start date, including any license or code condition open on the day you take over. A defined scope for incident response with an hourly rate above a stated threshold, because the resident who stops answering his door is a two hour event on a good day and something much larger on a bad one. A clause naming who holds resident deposits and in what account, since deposit handling rules differ by state and managers who inherit a commingled pot end up owning the problem. And a termination provision you can actually use in 30 days. On the cook, do not accept "she's a contractor" as a sentence anyone says out loud. Either the owner engages a vendor with a written agreement and insurance, or the meals stop before your name is on anything. Have your own counsel look at whether the management agreement drags you into that relationship at all in your state.

Basic question from someone with no experience. Why is the owner retiring the manager rather than selling? If the guy ran it eleven years and the license is clean, that's a person who could probably buy it.

Ember, plenty of long-term managers have no capital and no interest in owning. It is a job to them. Trellis, the structural thing worth asking for is a setup fee. Whoever steps into that role inherits eleven years of one man's undocumented systems, and month one is not management, it is reconstruction. Rent records, resident files, who has which key, what the inspection punch list said last year. That work deserves a number of its own, something in the 2,000 to 3,000 range, rather than assuming the monthly fee absorbs it.

Two vacant rooms at 780 is 1,560 a month the owner is already losing. Your fee increase is 391. If you walk in with a filling plan for those two rooms the fee conversation stops being a cost conversation.

The turnover number is low. I do rehab work and a room clean-out where someone lived 26 months is not a day of coordination and a mop. Wall repair, sometimes flooring, and every so often a bed frame and a mattress you have to haul. Even if the owner pays the trades, your coordination on that is more like 6 hours than 3. 350 covers it once. It won't cover the one where you find out why he stopped answering the door.

Also, four bathrooms for 14 rooms means fixture failures are constant and every one is an emergency to someone. Ask the retiring manager how many after-hours plumbing calls he took last year. Whatever he says, that's your real hours number, not 20.

I'd want the last two annual inspection reports before signing, plus any correction notices. Not because I think there's a problem. Because if there is one, the day your name appears as manager is the day it becomes your correspondence to answer, and you should know what's in the file.

Harrow's right about the bathrooms. Fourteen people on four baths, shared laundry, one water heater probably. Ask its age. If it goes in February you'll spend more hours in a week than in your average quarter.

The thing that would stop me is that the whole asset depends on one license and one owner's eleven year relationship with an inspector. That's fine as a management account, since your downside is a canceled contract. I wouldn't own it at 780 a room without knowing how portable that goodwill is.