Many investors, new to working with a professional management company, don't know what is a fair or typical fee structure.
With smaller rental properties, there are typically two types of fees. A "leasing fee" (for example, 50% of the first month's rent when a new lease is signed) and a monthly percentage of the rent amount (anywhere from 3-10% is not uncommon, with 6-8% being common in my experience).
I personally have never agreed to pay a "leasing fee" on my properties. I don't like the idea that my manager gets paid more if my tenant turnover is higher and they're signing a new lease every year or so. I want my manager to find tenants that are likely to stay for a longer period. Turnover is costly, carpet, paint etc adds up if you have tenants moving in and out annually.
So I pay only the monthly percentage of rental income, usually 6-8% depending on how many units, location etc. On larger multifamily or commercial units, the percentages can be much smaller.
With this simple approach, the more money that comes in, the more income you and the manager get, so your incentives are aligned. Realize though, that the expenses of operating the building do not directly affect the manager, so he/she may be in favor of costly improvements that may seem excessive to you.
As with everything, it is key to get recommendations from fellow investors for good property managers and interview several. And remember, their commissioned sales people, so ask good questions and don't just listen to their pitch. Don't be afraid to be direct and ask any question that comes to mind. With a good manager, you should be able to have open and common-sense communication.
Think of the market value of your property. Now imagine you had a car worth that same amount. Would you let just anybody drive it? Of course not. Your property is just as important, so be smart about who you hand the keys to.
I hope that is helpful, and feel free to contact me directly if you have any further questions. I'm here to help.
Dan O'Donnell, 360-220-7157
RE/MAX Whatcom County, Inc.
The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?
Not 55 but found a place you like?
Are you looking for a mobile home and frustrated that so many parks are "55 and over parks"? You might want to dig a little deeper.
I recently sold a home in a 55+ park and was told by the manager that a certain percentage of people there can be under 55 years old. So he told me that my buyer didn't necessarily have to be 55+ as long as they met the rest of the parks tenant screening criteria.
This particular park is in Bellingham, Washington and the laws may differ in other areas. But it is worth asking the question. instead of just assuming you aren't eligible to live there.
So that's the hot tip of the day, I hope it's helpful. If you have any other questions feel free to call any time, I'm here to help.
Dan O'Donnell, 360-220-7157
RE/MAX Whatcom County, Inc.
The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?
Bellingham has wonderful outdoor opportunities. One of my favorite is the hike to Park Butte. This past weekend, my friend Forrest, my dog Frog and I set out to Park Butte, which is just south of Mt Baker and has incredible views of Mt Baker, the Twin Sisters, the San Juan Islands, Mt Ranier etc. It is an incredible spot.
Friday night we drove about 20 minutes south on I-5 and then headed east on Highway 20 to the Baker Lake Road, which takes you to the Forest Service Roads that lead to the trailhead.
The hike is about 3.5 miles and we arrived just after nightfall under a full moon. We set up camp and slept in our bags under the stars. The moon was so bright it was actually tough to fall asleep.
Saturday morning we woke up and hiked up the "Railroad Grade" which leads up the south side of Mt Baker. We hiked up to about 6,500 feet, with stunning views all the way. Marmots whistled and of course it drove Frog crazy. He'd chase chase after one and it would just duck into it's hole while a different one started whistling at him. Below is a picture of Frog looking West from Mt Baker, ears flapping in the wind.
We spent some time talking with climbers who were supposed to be sleeping for their 1am climb to the summit. But they were too excited and were just hanging out taking in the views. They were with a guide team and told me one of their guides had climbed Everest. I didn't get to meet the guides because they were sleeping like they were supposed to. We spent some time just hanging out below the foot of the glacier before turning around.
We slid down some snowfields hiked back down "Railroad Grade" on our way back to Park Butte. Passing some really interesting rock formations. Mt Baker is a volcano, so there are some neat shapes and patterns.
After getting back down to the meadow, we forced our tired feet up Park Butte again and up to the lookout cabin. The cabin was originally a fire lookout built by the Forest Service in 1932 but is now maintained by the Skagit Alpine Club. It is set right on the top of the Butte and has a 360 degree view and a deck wraps around the entire cabin. If you're lucky enough to be the first one there (or the people there are friendly) you can stay the night in the cabin for free. To our surprise, the cabin was empty. So we moved broke camp and moved to the cabin. Check out the view of Mt Baker from the window!
We lounged around the cabin and met many fellow hikers who stopped by to take in the view. We got some much needed rest and ate our freeze dried curry and blueberry cheesecake, which were surprisingly delicious. Then came the ridiculous sunset looking back northwest toward Bellingham and Whatcom County, the San Juans and even Canada! Below are some pictures of the sunset, the cabin etc.
I hope this gives you some inspiration to get up in the mountains and enjoy the outdoors in our area. If you have any questions or comments please feel free to contact me any time.
As always, I'm here to help you with any of your real estate needs, so feel free to call or email with no obligation. Thanks for reading my blog!
Dan O'Donnell, 360-220-7157
RE/MAX Whatcom County, Inc.
The majority of my clients come by referral. This means I can spend my time providing excellent personalized service for my clients. As a result, my valued clients refer their friends, family and coworkers to me for real estate advice. I am committed to building strong, lasting relationships, one person at a time. Who is the next person you know who is considering purchasing or selling real estate?
A great site giving an overview of the county is www.Kulshan.com , with reviews of parks, directions to hiking trips.
Another excellent site is www.Bellingham.org , with tons of information and links to every aspect of life in Whatcom County. You could spend a week on these two sites learning all about our area. I've lived here all my life and I always get ideas on things to do when I browse through these sights. It reminds me what a wonderful place this is.
Last, but not least, Wikipedia is a great place to check. It is a powerhouse of information.
If you have any questions about housing in the area, of course feel free to give me a call any time at 360-671-2561 and I'll be happy to get you any information you need.
Dan O'Donnell, 360-220-7157
RE/MAX Whatcom County, Inc.
Benefit from my personal experience in buying, selling and managing property. I'm a Realtor, real estate investor, and Whatcom County native. Cofounder of the Bellingham Real Estate Investor Network.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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