Salary - On site vs. Off site

Hi all,

I am going to tell a long story about a bonus plan that should have never happened. But at the end of the story I have two questions. Her job includes, Leasing, giving work orders to maintenance, logging them into Yardi. She does not do any book keeping or marketing. I could go on about what she does not do, but I am not here to purge. I just want to be fair and do the right thing.

1. Should the value of the free apartment, paid utilities stay the same now that she is no longer living on-site. :

2. Is there a usually a difference in the salary of a manager who lives on-site vs. one that does not?

She ts recently moved to a house. She had been living on the property for 3 years. First she had a 2 bedroom 1 bath and we paid when her college age son came home they gave her a two bedroom 2 bath. (This is pre-me getting involved in the property.) She spent 8K remodeling it, and yes, we paid. We also pay her utilities, plus she had a bonus plan based on occupancy, $50.00 for every unit she rents, the bonus does not kick in until that tenant has been there six months, she gets the $ and the stays One of our biggest cost are non-collections, but very few 'Notices to Vacate, and even fewer evictions. Lots of collections, I should say ing a bonus for occupancyBASICALLY WE WILL PAY HER AN INCENTIVE OF $50 ON EVERY APARTMENT THAT IS BETWEEN 80% AND 90% OCCUPANCY. HOWEVER, THE BONUS IS ONLY PAID WHEN THE PEOPLE HAVE BEEN THERE SIX MONTHS. SO BASED ON THAT YOU WILL ALSO FIND ATTACHED THE BONUS INFORMATION THAT IS DUE JENNA AT THIS TIME. ACCORDING TO OUR RECORDS, SHE WAS OVER 80% BEGINNING JANUARY OF THIS YEAR, THUS HER FIRST BONUS IS DUE ON THE JULY 6 CHECK. THAT AMOUNT WILL ONLY BE $50. BUT THEN YOU CAN SEE SHE WILL HAVE $250 ON THE FIRST CHECK IN AUGUST; $200 IN SEPTEMBER; AND $250 IN OCTOBER. THAT IS THE EXTENT THAT WE HAVE FIGURED IT THUS FAR. JENNA DID QUESTION WHY WE DIDN’T PAY FOR THE MONTH OF DECEMBER BECAUSE SHE WAS AT 80%. I HAD INITIALLY INTERPRETED THE INCENTIVE THAT IT WOULD BE ANYTHING BETWEEN 80% AND 90% BUT SHE FELT SHE WAS DUE THE MONEY FOR DECEMBER. SO I HAVE AGREED TO GO BACK TO DECEMBER, THUS SHE WILL GET $50 ON THE FIRST CHECK IN JUNE.

AS FAR AS A RAISE IS CONCERNED, NO SHE HAS NOT HAD A CHANGE IN HER BASE SALARY. SHE STARTED IN DECEMBER 2009 AT A RATE OF $40,000 A YEAR PLUS AN APARTMENT. WHEN SHE FIRST MOVED IN SHE WAS IN A 2 BEDROOM/1 BATH APARTMENT. SHE GETS THAT APARTMENT FOR FREE. WE HAVE TO REPORT IT AS INCOME SO SHE DOES HAVE TO PAY FEDERAL TAXES ON IT SO WE ADD IT AS A “MEMO EARNINGS” ON HER CHECK EACH PAY PERIOD SO SHE IS NOT HIT WITH A LARGE TAX BURDEN AT THE END OF THE YEAR. BY JUNE 2011 SHE HAD MOVED INTO A 2B/2B APARTMENT WHICH NORMALLY RENTS FOR $750. WE DID NOT CHANGE HER AGREEMENT. THUS SHE IS GETTING A MUCH NICER AND LARGER APARTMENT FOR THE SAME VALUE WE HAVE BEEN CHARGING BEFORE. SO IF YOU CALCULATED THE $175 A MONTH X 12 THAT EQUALS $2100. THAT WOULD BE EQUAL TO A 5.2% RAISE. AT THAT SAME TIME WE AGREED TO COVER THE COST OF HER UTILITIES. SO NOW SHE DOESN’T PAY HER UTILITY CHARGES. THAT IS APPROXIMATELY $130 A MONTH. SO THAT EQUALS TO $1560 A YEAR WHICH IS ABOUT A 3.9% INCREASE. WE MADE THE UTILITY CHARGES RETRO BACK TO THE FIRST OF 2011 SO WE GAVE HER A LUMP SUM OF $840 IN AUGUST OF 2011. SO SHE HAS NOT HAD A CHANGE IN HER BASE SALARY. BUT SHE HAS HAD ADJUSTMENTS MADE IN THE WAY OF A LARGER/NICER APARTMENT PLUS UTILITIES THAT EQUATES TO ABOUT 9.1% ADVANTAGE TO HER.

I don't know what to do.

Good Morning! The one thing to do immediately is to update your policy regarding employees living onsite. Half your battle is over, in my opinion, now that the Manager is living offsite. Employees living onsite should sign a lease and an Employee Housing Agreement that spell out the terms of the Agreement. Usually, in exchange for living onsite rent free, employees cover the property and complete tasks on a weekly and monthly basis. Rent is usually added to the compensation package and taxed accordingly.

When an onsite employee chooses to move offsite and continues working at the property, their compensation is adjusted within a pre-determined time period. Or, your Agreement can specify that salary is re-visited at Annual Review time. Offsite employees may make more once they move offsite, especially if they continue to complete the weekly and monthly tasks (light checks, on-call coverage, etc.)

It is great that the apartment is already updated. Now you can certainly charge more in rent for another resident.

As to the structure of Bonuses: in my opinion you should offer a Bonus per apartment leased. This should not be tied to occupancy. Bonuses tied to occupancy are usually a percentage of overall salary - say 10% of $40,000 would be an annual bonus of $4,000 paid quarterly if all leasing goals are met, etc. I would suggest you create a very structured measureable Bonus Policy so there are objective ways to award employees.

Just because this manager received a "9.1%" salary increase since 2009, does not mean she did not earn it. I think when companies allow employees this type of additional benefit, they must consider the fact that Residents, vendors and other employees interrupt that person to handle emergencies, close pools all summer long, have people knocking on their doors at all hours on some properties and the employee cannot really relax because they are visible at all times and are always representing the company and property. It is not always fun and games living onsite.

Kimberly,

I think Mindy hit it on the head! I know myself I never wanted to live on site because past experiences said I did not get paid enough money. Love the job, but some properties that are older will have more people calling and ringing those bells and knocking on doors. Then there can be more modern properties with higher rents and you can have some very high maintenance customers.

Enough of that though! Mindy put it all together and I think it is great logic and feedback!

This is a topic batted around a lot by apartment managers. First, the "reason" for the manager living on site is two fold:

1. To be available for the tenants in the event of an emergency, or immediate maintenance need. If my water heater is leaking all over the carpet, I need the manager, and right now. I think everyone is going to agree with that. I don't need to be trying the office, the apartment managers apartment phone, or their cell phone, or their mother's phone or the local bar and grill if this happens to me as a tenant. Let's face it, you do something few others do as an apartment manager, your a 24/7 babysitter of both tenants and the property. If someone can't come to that understanding, they should really look for other work.

2. You need to realize that your "presence" on the property, and yes, them knowing you "live" there, is an abatement of possible troubles. The thinking is that if your going to be seen, then your going to behave or suffer whatever consequences the manager doles out to you. If no one is around, we will empty our ashtrays from our car or the parking lot. However, if the manager and their watchful eye is there, we probably won't risk it. That is the sort of thing that makes owners want "on-site" management.

The trouble with all of the above is this: At "most" salaries paid to on site managers, you probably can't get 24/7 security guards or someone stuck in a cubicle answering the phone all day and night. The on site will decide "hey, I have a life too!" Let's get real.

Still, using the same old mentality, owners publish jobs with "Must live on site". Or put another way, if you want to work for me you WILL live on site.

It never ends, and never will.

Most of my experience is running subsidized apartment property managment, so here are a few thoughts on that aspect:

The value of the free apartment and utilities are more than half of the manager's compensation. So, if the manager moved off the property, he/she/they would be taking a 50-60% pay cut, rendering the job not worthwhile. They would also be fired, as the agreement is to live on site.

Each complex has a budget which outlines the funds available for manager pay. While shifty shifting can be done sometimes, there is not a lot of wiggle room. If the budget contains $500 a month for the office, and $700 a month for the grounds, then to increase salary, the shift shifting must come into play. Most managing agents are not willing to shifty shift the budgets. However it is done at times.
Usually, it is better for the grounds man to quit, and then contract the grounds out from the PMC. This does negate the concept of husband/wife team though.

When you add up "everything" such as the free apt, utilities, office pay, grounds pay, and add in the $7.50 an hour maintenance jobs, it is possible to earn around $2,500 a month for the "team". This is the idea of the husband/wife team, and what makes such a thing barely worth it, but in these hard times many still look for these jobs.

I know this thread (and others) are probably based around market rate properties, even upscale ones. I have to laugh when I hear about "leasing bonuses". Here, no leasing, your fired! So your bonus for recruiting a newby is you get to keep your job. It is indeed hard to sell this program for a pair of new managers, I assure you!!! It is all about a warm body in each stall! And no late rents, no trouble and no high cost repairs, and no looking for the manager and can't find them! Catch 22? Naturally!!

Anyone familiar with subsidized properties will be on the same page when they read this.

Maintenance should make 2 or 3 times more than manager. Maintenance Technician minimum wage $33 per hr.