Real estate investors worry about property managers charging $400 monthly
13 posts across 5 communities in the last 90 days; 62% from r/realestateinvesting.
“This is why some landlords hire management companies and/or real estate agents. I am a realtor and have been leasing/selling property for years. It is hard work. As someone mentioned, owner/landlords can be scammed by prospective tenants. These tenants know that and look for…”
“In our experience most people switch the other way around, but yeah switching to self-managing is definitely good for savings, and if nothing else good experience to have as a multi-property owner. Some notes: - Keeping everything in writing is a great idea. Organizing by…”
“You need to hire a full time property manager for 8-10%. There is no other solution to your problem. When picking a manager ensure you don’t go for the cheap one. If you find one who charges 10% and won’t give a discount but interviews better do not cheap out over 1-2% that can…”
Several real estate investors express concern about the cost and reliability of property management services, particularly when a manager unexpectedly stops working or charges high fees. Some suggest exploring alternatives like virtual assistants or shifting investments to less hands-on property types.
SOURCES (44)
“Ok. That makes more sense. [re: Bought 2 rental properties that will bring in $2,600 to 2,700 a month in income]”
“This is why some landlords hire management companies and/or real estate agents. I am a realtor and have been leasing/selling property for years. It is hard work. As someone mentioned, owner/landlords can be scammed by prospective tenants. These tenants know that and look for owners trying to lease their own property [re: [Landlord - US-VA] Renting out my condo for the first time on my own. It's painful.]”
“A realtor will expect 10% or 1 months rent to do this, which is essentially the cost of a property manager. [re: [Landlord-US-SC] Anyone rent out their house after moving out of state? Was a property manager worth it?]”
“No one needs a property manager. They literally don’t do anything for you that you can do yourself, even from hundreds of miles away [re: [Landlord-US-SC] Anyone rent out their house after moving out of state? Was a property manager worth it?]”
“So currently I am a property manager that works under a broker that gives us SFR and multifamily house to manage but we get paid hourly. I applied to a different broker that allows me to work from home and make my own schedule but I have to onboard my own properties and manage them 24/7. I get a percentage of the management fees of the properties I will manage. Does anyone have any experience doing this or any recommendations? I will be switching over from w-2 to w-9. Con is also that there’s a”
“Does it really make sense to have a property management LLC if you hire a 3rd party property manager ? I’ve read it can be very beneficial if you manage your own properties, but is it really necessary if you hire a property manager to do it all for you? From a tax purpose, I understand it can have some benefits but what about for asset protection?”
“Yea, all PM have to have their Dre license in CA. A lot of realtors if you call them will list the home for rent on mls as well as the other sites and get it rented for you for a smaller fee. If you want them to actually manage it, you will have to ask if they have the bandwidth for it but most will say yes for 3 percent or so of the rent. Keeps cost down for you.”
“Yea the fees can add up and eat into your returns. The portal can help streamline repairs and helps with documentation, but will most likely not eliminate all calls. Even with PM you may still have to be involved with major decisions anyway.”
“You have way more than me I have 4 properties that earn me about 100k after all hoa, taxes, but not before renovations and repairs. These properties are worth decent amount I paid about half the value they were almost back in 2005-2013 they are today worth about $500k-$700k each. I got rid of mine a long time ago 8 years ago actually. I sold it to myself i'm busy working which I was but really wasn't much to it and I just use realtors for half the properties further out and self list oth”
“The math you're running is the fee stack, but the real risk when you fire a PM is losing the one person auditing the numbers, even if those "looks good" inspections never caught anything. The month you go self-managed, you become the only check on your own maintenance invoices, your own rent ledger, your own vendor pricing. I run my properties through a PM and the only thing that has ever actually protected me is tying every charge back to what hit the bank the month it posted, not”
“I hired a professional PM company with a fancy office for a month before I fired them. That's how short of a time I needed to know they were useless.”
“As someone who works at a management company, manage it yourself. Most of these companies are a mess. The only real benefit are the maintenance guys on staff which with 15 units you could probably keep someone on retainer to help with that.”
“We have a commercial property that is NNN. I self manage that. Nothing comes up since they are responsible for almost everything. I see no point paying someone 10% for literally doing nothing.”
“In our experience most people switch the other way around, but yeah switching to self-managing is definitely good for savings, and if nothing else good experience to have as a multi-property owner. Some notes: - Keeping everything in writing is a great idea. Organizing by yourself can be hell. - Tenants might call you anyway at the start, but just tell them it is more convenient for both of you if they submit a ticket so you can keep track of it and attach images to each issue. - Try to pick a s”
“What about if your property is 2 hours away and you also work 9-5? How would you self manage?”
“I’d be trying to hire a dedicated manager of the properties for like 80-120k/year. Spread across 100SFH, that’s like 100/mo per house. And it’s just one person that you need to find that does a good job and manages the whole portfolio.”
“The property management question is the one that didn't really get answered. If you're doing the management yourself treat that as a separate expense rather than letting it disappear into the 50/50 equity split. That story upthread about the working partner feeling like they're working for free a few years in that's usually what a missing management line looks like down the road. A bigger equity share compensates you on the back end but it doesn't pay you for the work you'”
“That’s not always true. And all property managers have to be licensed. I’m sorry if you have had bad experiences but you can’t blanket them all as bad because of 1 or 2 bad apples. That’s like saying all dogs are bad because a couple of them bit people. In every industry there are the good the bad and the ugly versions. Vetting, referrals, and checks and balances help a lot. I trust but verify until I don’t need to verify. I have been through several property management companies and some are gr”
“This is pretty fundamental, and I think something is lost in this second-hand communication. Your management company should be an S/C corp at that level. Your rentals would and should remain held by you or your trust. I'd be surprised if blending both was advised by even a 2nd year CPA.”
“a bit late but i would recommend miami pro management if you are in south fl! they manage my property and its been a breeze. its a family owned business so its nice to have that connection directly to the owners. instead of those huge property management companies where you are just one more property”
“the clause that matters more than any line item: total cost of management, not the headline %. an 8% company with an uncapped 20% maintenance markup can cost more than a 10% company with a capped markup and free renewals. Ask each company to run last year's actual numbers on a comparable property through their fee schedule so you see all-in cost as a % of collected rent, not just the advertised fee. on contractors: get your existing network written in as first-call before signing, not negoti”
“With property management companies you can negotiate the inflated fees down. If there are a lot of competing companies, the better terms you can get. We have much less properties and the most important part is not hearing about anything, except getting monthly P/L statements. If we dont hear from them for 6+ months at a time, it is great, just like investing in S&P 500...”
“Do Property Management companies typically allow me to choose which contractors they use? I've already got a strong network of reliable contractors who charged fair market rate.”
“Realtor property managers are the quickest way for your property to go to crap and get fleeced. They pad their pockets getting kickbacks for overpriced repair, they do scummy things with the contracts, etc.”
“I understand where you're coming from, but I don't think I'm at a point where it makes sense to optimize my business processes. A full-time property manager would cost about $13k/yr. I could easily make all of that back in bonuses by just performing well at my day job. After some reflection, I've decided to hire a full-time PM so I can focus on getting promoted and eventually buying more real estate. Once I have enough doors to sustain 20 to 40 hours of work per week, I'll hi”
“This is what I'm worried about. So many PMs feel like a cash grab. I want a PM that will be responsive to my tenants and take care of my properties. Not just cash a check every month.”
“Well, I'm coming from a different angle in that I'm in California and manage under 10 single family homes right in my backyard. I did briefly try a property manager back during COVID, mainly because I was trying to minimize face to face contact. I was underwhelmed to say the least. They were mostly acting in their own interests and didn't give it nearly the time and attention that I do. But it's also a lot easier in my situation to DIY than with a remote portfolio.”
“You need to hire a full time property manager for 8-10%. There is no other solution to your problem. When picking a manager ensure you don’t go for the cheap one. If you find one who charges 10% and won’t give a discount but interviews better do not cheap out over 1-2% that can cost you thousands in a greasy manger. I own 27 units currently and it takes on average every time I’ve hired a manger about 5-6 months UNTIL your portfolio is stabilized. Now if you go longer than this period and are not”
“By law you need a property management license to collect rent and manage leases unless you are the owner. This applies to most states but law does vary.”
“20 doors plus full time work and there is no way lol. Local is fine. I don’t like the $ mgt charges and feel like I can turn around repairs and turnover much faster than anyone i know using a mgt company.”
“I work in the Bay Area, pushing for Director before 40, I have 5 properties back east. I have a property manager at 8.5% + a bunch of fees; lease renewal, new tenants etc. Anyway, I only have stress when dealing with renovation projects, which is each new property and small things on the others. I don't know how you self-managed 10 and still had bandwidth for your day job. Impressive prioritization skills. Like you, my ROI time is best spent at work advancing my career, so i delegated proper”
“This is why I only buy rentals in my area. I can't imagine trying to deal with issues a thousand miles away.”
“Why are you worried about the 8% when you are on track for an increase to your W2? What do you when dude taking in $400/mo all of sudden decides during a shitty month it's not worthwhile? Plus yes most states require someone managing properties for other individuals require a license, why even try to finesse it? The only way around it would be to put them on W2, and then you have other concerns with that.”
“My license is not in KY, but typically a license is only required to act as an agent for the owner. Can you get around the license issue by just adding your buddy to the LLC (assuming he's okay with sharing the risks that come with that)? If you end up having to go through a professional PM, are the returns still worthwhile? In your situation, I usually recommend looking at shifting the investment to something like retail or industrial that requires much less owner involvement.”
“That's clever locking in a fixed rate and having one person who actually knows your properties instead of some faceless company juggling 500 doors”
“I went with option 2. I hired a pm just for my business at a fixed rate ( no leasing commissions or percentages). That did a few things. It took it off my plate, I locked my management cost, and I had better management since it was one persons job to just manage my book. They got to know the tennants and properties. They even came in and added some fee income. You may also be able to accomplish this with 10 doors with a VA for pennies. You will just have to train them. And will still outsource s”
“Worth separating "I'm burned out on active management" from "this portfolio is the wrong portfolio," because they call for different fixes. Before deciding to sell anything, try isolating which properties or tenants are actually driving the stress, it's rarely spread evenly, usually two or three problem units account for most of the pain. A middle path worth testing before a full sell-off, hand your worst-performing properties to a property manager for six months and”