Re: Multi-family Question - Posted by Frank Chin
Posted by Frank Chin on October 13, 2005 at 07:38:12:
I’m a NYC investor, and I’m a world away from TN.
I basically been doing 2 and 3 families, and looked into 6 to 8 families. Most of the 6 to 8 familes in our area utilize one tenant at a reduced rent to be the building manager. If the unit rents for $600.00/month, lets say, this tenant would pay about half, or $300.00. There seems to be no pattern, as it varies all over.
Another investor, who taught out of state investing said he advertised for retired people thru local churches, to do handy man work, and help manage his rentals. He couldn’t call them property manager as in most states, that requires a license.
Then, there’s property management firms. For properties of this size, it’ll run you 10% PLUS additional fees, where extras may include changing light bulbs for instance.
The downside of property management firms is for many, small residential properties are a pain, and at 10%, they won’t even do a good job, as you’ll probably be one of the smallest accounts. I’m also into renting condos, and there’s one we got that more than one management company dropped the condo complex after the HOA complained about bad service. We were dropped on the grounds that the complex of 104 units is on the small side.
Another friend of mine used a local broker down in FL when he lived in NY to manage his rental. The broker hoped to make a few bucks collecting fees on renting out the units, and eventually have first dibs on brokering the sale. In all states, brokers are legally allowed to be property managers.
I actually considered using a local broker myself to manage a rental that was 45 minutes away as her office was a few blocks away, and she owned the rental next to mine. I see her husband come by to take care of the garbage, sweep the sidewalks etc. If it wasn’t for this proximity, I wouldn’t have considered her. Many lazy managment firms collect fees, and does nothing figuring you’re too lazy to check anyway since its such an inconvenience. If I have to go to a place an hour away several times a month to check on the management firm, why would I need them??