Posted by JPiper on December 09, 1999 at 08:31:37:
Here?s a personal viewpoint.
First, I think the 10% fee is reasonable for rental houses ?.you might be able to find it for a little less or a little more. (Is this person licensed? Property management for others is an activity that requires a license).
Second, I think that management fees can rarely be justified from a cost standpoint on small rental properties.
Third, it?s rare that you find competent management in small rental properties. Let?s face it, the competent ones have bigger fish to fry than small rental properties.
My opinion is that you should learn how to manage yourself. No one else will ever care more about your property and your finances than YOU. If this means you have to learn a few new talents, so be it. Maybe you?ll need to learn how to be more organized (I understand this one?organization is not my strong point). Maybe you need to learn how to screen tenants. But understand that NONE of these tasks are unachievable.
IF these properties are houses, you might consider lease/optioning rather than renting. It cuts down significantly the time spent on management.
I own a couple of rental properties and have been thinking about hiring a friend’s wife to manage them. She has been managing a number of properties for the last 5 years. She’s very thorough with screening tenants, video tapes the apartment as the new tenants are present(so everyone knows the move-in condition), and her husband handles minor repairs. She seems very organized (unlike me). She charges 10% of the rent for her services. It seems pretty reasonable to me. How about the rest of you?
In addition to what Mark (SDCA) and JPiper have said, you also might want to consider the wisdom of transforming your friendship into a business relationship. Sometimes the most solid of social relationships fall apart when there’s money involved.
Posted by Mark (SDCA) on December 09, 1999 at 10:13:00:
I agree with what JPiper said. Also, I might add that I own rental houses and these are low management hassle. Have the tenants handle the minor repairs and contract out the larger ones. I do all my business by phone and mail.
Smaller apartments (2-4 units) are a different story. You need an ONSITE manager there. Offer him disscounted rent to be your “eyes and ears” at the property, take service calls, show vacant apts etc.