Landlords that use a PM company: I think my PM gets a kickback fee from the companies used in service calls, and I’m not sure if the calls are real. Anyone else dealt with this? I’m out of the state.

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Multifamily owner and PM company owner here - I’d say it’s maybe 50-50 on whether or not they add margin on top of what an external vendor charges. All the details should be in your management agreement at a minimum. If I were you, I would just ask!

Now, if you’re talking internal labor, there is absolutely a margin on top of the hourly rate or salary rate that the maintenance person, etc is making.

likeuplifting

That is how they make money. Broken model but if your hands are tied

I always ask this question when screening PM companies. I won’t go with a company that isn’t aligned with my interests. This, in my opinion, puts them at odds with your goal as a property owner

It’s common for property managers to charge a percentage-based fee for “project management.” Because they contract at scale, they can often negotiate better rates with service providers than you could on your own. Keep in mind that the $100 monthly management fee doesn’t cover everything. It primarily pays for a layer of insulation between you and an upset tenant. That said, if your total cost for their services exceeds roughly 15 percent of your gross rents, they may be overcharging, as that’s generally considered the industry benchmark.

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