Is 10% of rent the going rate for managing a triplex, or does small get charged more?

Question

I don't want to be the one running this day to day, so I'm pricing management before I price buildings. Every article says 8 to 10% of collected rent. Then I called two companies about a hypothetical triplex with $1,300 rents and one said 10% with a full month's rent as a leasing fee, and the other said they have a $150 per unit per month minimum and wouldn't quote a percentage at all. On $3,900 of rent that's $390 versus $450, which isn't the gap I expected but the leasing fee is. Is the flat minimum a small-building thing? And what's actually included, because one of them mentioned a separate charge for coordinating repairs.

devon_pierce · Answer

The flat per-door minimum shows up because a $1,300 unit takes the same phone calls as a $2,600 unit. On a triplex you're a small account either way, so some shops price you off effort. Watch three things in the agreement: the leasing fee (half a month to a full month is the range I see), a markup on maintenance invoices, sometimes 10%, and whether they keep late fees. That last one is worth real money on a building where somebody pays late most months.

brandonlee36 · Answer

The repair coordination charge is the one that surprised me when I read a management agreement closely. Some companies charge a project fee on anything over a dollar threshold, so a $4,000 roof repair comes with a $400 line you didn't plan for. Also ask what happens to the fee when a unit is empty. Percentage of collected rent means they earn nothing on a vacant unit, which is the incentive you want, but a per-door minimum keeps billing while the unit sits.

Is 10% of rent the going rate for managing a triplex, or does small get charged more?

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