Pricing in-house management honestly against $29,400 a year on 22 units

The line that jumps out at me is that you priced the employee at their wage and the manager at their fee, which are not the same kind of number. The manager's fee already includes their software, their insurance, their after hours phone, their bookkeeping, their bad debt on a client who doesn't pay, and their turnover when the leasing coordinator quits. You'd be taking all of that on at cost and hoping cost stays flat.

I'm still working out what my first deal costs so I'm not the person to tell you which way to go, but if I were doing your spreadsheet I'd add a line for what a bad hire costs you. One person who mishandles a security deposit accounting in a state with strict deposit timelines is expensive, and deposit rules and deadlines differ state by state.

Take the numbers, then what's wrong with them. An in-house case running $36,000 against $33,800 outsourced means paying about $2,200 a year for control. That is the whole argument, and it sits inside the noise of a workers comp quote that has not even been pulled yet. Until that number exists, there is no real comparison, only two guesses. What is missing: the value of the owner's own hours in the in-house case. A 22 unit part time manager still escalates to the owner, who ends up taking the 9pm call about the roof. Say that is 4 hours a week. At any rate the owner would accept for that time, it is real and it is not in the spreadsheet. Second gap: a maintenance markup an owner expects to recover assumes vendors can be sourced at the same price a large manager gets. A manager dispatching 200 doors of work gets better pricing than one dispatching 22. The typical pattern is a small owner paying 10 to 20 percent more per job than the volume dispatcher, so a recovered markup can vanish entirely. A hybrid approach is usually the version worth pricing seriously, because it puts labor where the owner's edge actually is: knowing the specific buildings. The edge rarely extends to tenant screening or to a city's rental registration and inspection cycle.

One thing to check before deciding anything: read the loan documents. Agency and DSCR style loans on small multifamily sometimes carry a covenant requiring a professional third party manager, or requiring lender consent to change managers, and self-management can be a technical default even when nobody notices for years. It varies by lender and by the specific note, so pull the documents and confirm in writing with the lender before firing anybody. That clause has shown up as leverage in refinance conversations before. It's cheap to check now and awkward to check later.

That first point is worth chasing, and then the management agreement itself. Things to look for in a current one: notice period for termination without cause, whether there's a termination fee or a requirement to pay out remaining term, whether the manager keeps leasing commissions on tenants they placed after the owner leaves, who owns the tenant files and the application records, and how long they have to remit final funds and deposit ledgers. Agreements have turned up with a 90 day notice, a clause holding the owner responsible for the manager's renewal commission on any tenant in place, and no stated deadline for transferring deposits. That last one is the fight nobody wants. Also check whether the agreement lets maintenance dispatch move in-house at all. Plenty of them require all work orders to route through the manager and make the owner liable for anything the owner's own vendor does. A hybrid arrangement may need their consent in writing, and if they say no, that tells you what the hybrid was worth to them.