Why the percentage management fee model loses money on 2-4 unit buildings
Take a management book with a mix of unit sizes, where the small multifamily side is where margin tends to disappear. Ten percent of collected rent on a triplex averaging 1,200 a unit is 360 a month for a building generating about the same call volume as an eight unit. A duplex owner costing 4.2 hours of coordinator time on a single water heater in one month, paying 240 for it, is a typical version of the problem. A percentage model across the board, say 10 percent of collected, half a month leasing fee, no maintenance markup, no setup fee, runs into a structural issue: at a loaded coordinator cost of roughly 34 an hour and about 2.1 hours per door per month across the book, that math works on a fourplex and breaks on duplexes, because the fixed work per building, owner statements, inspections, insurance certificates, the annual rental registration, doesn't shrink with door count. An alternative worth modeling: flat 105 per door with a 210 per building monthly minimum, leasing fee to a full month, and a 10 percent maintenance coordination markup on anything over 500. Repricing a book that way typically moves a meaningful share of owners upward, some by more than 40 percent, with real attrition risk. The part that tends not to work cleanly is the minimum itself. A duplex owner paying 240 today would still pay 240 under a 210 minimum, because two doors at 105 is 210, so the minimum as drafted doesn't fix the duplex problem, it just renames it. Raising the minimum to something like 275 fixes the math and risks losing every duplex on the book. Pricing small multifamily separately while keeping the owners is the harder problem underneath all of it.
