Property Management is an investment

August 19, 2021by melissad0

Seems odd to say property management is an investment, but it is true. Many property owners look at the monthly management fee and think what am I getting for this? I would submit to you that the management fee should be looked at more like an insurance policy. When you pay your premiums each month it is for the what if? The unexpected, right? We believe that is how the property management fee should be viewed as well.

Each month we collect a fee. Typically, a percentage of the rent. 8-10% is common. Half the percentage you tip your waitress daily. This basic management fee covers general wages, technology, office space and the ability to be available when needed. Some properties, residents, and clients require more attention at any given time. Having the resources ready to act, is imperative.

Now let’s consider the unexpected.

  • The major leak with an insurance claim
  • The resident claiming the HOA or neighbors are harassing them.
  • The small claims court case filed for an itemization dispute.
  • A pandemic hitting and managing the legal processes that changes daily
  • The resident that decided they didn’t care about giving a 30-day notice and just drop keys in our lap.
  • The afterhours emergency call because they got locked out.

That is what the monthly management fee is. It is your insurance policy for the unknown and uncontrollable.

At move in, we can spend anywhere from 8-10 hours a week working on that one properties marketing, showings, updating the owners, running applications, processing the lease, completing the move in assessment and monitoring rent ready work. Is there a leasing fee sure, but that goes pretty quick between wages and mileage to and from.

This same idea goes for move outs. Again, anywhere from 4-8 hours a week given to each property during the move out process. This 30 + step process has several time sensitive tasks- more on this in another blog. It is a lot of hurry up and wait. Wait for the vendor, wait for the residents, wait for keys, wait for money. But, Property Managers have to be ready at the drop of a hat. We can get keys for 8 properties in one day and the clock starts. We have 21 days to get it all done. Not to mention the other normal tasks we have.

Invest in your investment
Photo by Kindel Media on

So while in the past it was easy to consider that management fee was going to actual tangible work each month, it is just not that simple. Unlike attorneys who charge hourly for any work done, property managers have to estimate and hope that the property does not demand more. Sometimes it works in our favor and other times, we almost pay to manage the property.

Property Management is an investment. An investment for your investment. Choose wisely, and remember you get what you pay for.


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