Fee structure

I recently invested in a Multi Family 230 unit apartment complex and I have a few questions that I was hoping someone could help me with. I usually invest in Commercial assets so I do not know much about the Multi Family industry. My questions are can someone tell me when I hire a Property Management Co. what is the usual management fee? I have been told 6%. Who is responsible for the employee's salary and benefits? The Management Co or is this part of the owner's expense? If I would like the Manager to live on site would I provide the apartment or is this something that the management co would reimburse the owners for? Any help that someone can give me will be appreciated.

It's been a while since I have researched this, but 6% seems pretty high?

6% seems high to me, but we would all need a bit more information to help you with this. First, where is the property located. Fees are sometimes different based on location. For over 200 units in one community, I have seen fees from 2% - 5%, but please don't just look at the management fee. Many times a company will quote you a very low fee (like 2%), but then will have "add-ons" like accounting fees, marketing fees, payroll fees and such. Additionally, some will have additional fees for managing unusual situations like handling a large renovation, or complete re-roofing projects. I would be very happy to chat with you about this and provide a little insight to help you out. my email is [email protected].

Depending on responsibilities the fees usually range from 6% to 9% of collections
On site staff will be a property expense

WOW, that seems high. What part of the country are you in, Al?

Vicki, I have operated in many different areas including Midwest, Deep South, Great Plains, northeast

Got it. Most of my management experience is in Texas and Tennessee. Those fees are very high for our areas. It really does depend on where her property is located.

I agree. Typically I see 3-7%

4% is fairly standard for a over 100 plus unit community. Salaries would be included ion the property budget and not included in the fee. Regional and back office staff are covered in the fee. An apartment is negotiable and can be offered at a discount or for no cost, and again this would come out of the property’s budget. This is what I have seen typically.

Thank you to everyone for your response. You have helped a lot. Happy New Year!!!

What type of minimum fees is everyone seeing for new construction/pre-occupancy? If stabilized monthly management fee is around $9k (3%), is a $5k/month minimum a fair number?