Quiz: Property Management

1. A professional property manager typically charges:

A flat $50/month regardless of rent8-10% of collected rent for SFR, plus leasing fees for new tenant placement50% of all rental incomeNothing until the property sells

PM fees for single-family rentals are typically 8-10% of collected rent (not gross scheduled rent), plus a leasing fee (often 50-100% of first month's rent) when placing a new tenant. Multifamily rates are lower (4-7%) due to economies of scale. Always factor PM cost into your underwriting even if you self-manage initially.

2. The most important factor in tenant screening is:

Whether the applicant seems friendlyVerified income (typically 3x rent), rental history, credit, and eviction records applied consistently to all applicantsHow quickly they can move inWhether they'll pay first month's rent in cash

Consistent screening criteria protect you legally (Fair Housing compliance) and financially. Verify income (pay stubs, tax returns), check rental references (did they pay on time, leave the unit in good condition?), pull credit, and check eviction records. The cheapest vacancy is one you avoid by placing the right tenant.

3. Maintenance reserves should be budgeted at approximately:

$0 because the tenant handles everything5-10% of gross rent for ongoing maintenance, plus separate CapEx reserves for major replacements100% of the first year's rentOnly what you spend in the first month

Budget 5-10% of gross rent for routine maintenance (HVAC filters, minor repairs, landscaping) and a separate CapEx reserve (typically $100-200/month for SFR) for roof, HVAC, water heater, and appliance replacement. Older properties need higher reserves. The number is never zero.

4. Self-managing is most appropriate when:

You have 50+ units spread across multiple statesYou have a small portfolio, live near your properties, understand landlord-tenant law, and value the cost savings over your timeYou want to avoid all tenant interactionThe property is vacant

Self-management makes sense when you have few units, live locally, know the legal requirements, and your time cost is less than the PM fee saved. As your portfolio grows or becomes geographically dispersed, the PM fee pays for itself in time savings, legal compliance, and consistent operations.

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