Property
Management

Self-manage vs. hire

Decision matrix:

• Self-manage if. Within 30 miles. Under 10 units. Available for emergencies. Strong interpersonal and screening skills. Comfortable with conflict.
• Hire PM if. Distance, portfolio size 10+ units, high opportunity cost on your time, weak conflict tolerance, out-of-state ownership, scaling quickly.
• Hybrid. Self-manage where you live; hire for out-of-market properties. Many investors run 2 systems concurrently.

PM fee structures

• Monthly management. 6–12% of collected rent. SFR often 10%, multifamily 5–8%, commercial 3–5%.
• Leasing fee. 50–100% of one month’s rent for new tenant placement. Some charge flat $500–1,500.
• Renewal fee. $150–300 per renewal, or 25% of one month’s rent. Aligns incentive to retain tenants.
• Maintenance markup. 10–20% on vendor invoices. Or flat dispatch fee $35–75. Big hidden cost driver.
• Setup fee. $150–500 one-time per property at onboarding.
• Vacancy fee. Some charge half-rate or flat fee during vacancy.
• Eviction fee. $300–800 typical to handle eviction process.

Software stack

• AppFolio. Institutional SFR and multifamily. $1.40/unit/month. Full PMS: accounting, tenant portal, online payments, owner portal, marketing syndication.
• Buildium. Mid-market PM company tool. $55/month + per-unit. Strong multifamily workflow.
• RentRedi. Small landlord friendly. $29/month unlimited units. Simpler interface, mobile-first.
• TenantCloud. Free basic tier. Affordable small-landlord option.
• Stessa. Free landlord accounting and reporting. Good for passive owners with PM.
• RentManager / Yardi / MRI. Enterprise/institutional CRE and multifamily. Complex deployment, $500+/month.

Tenant onboarding

1. Marketing and showing — Zillow, Apartments.com syndication
2. Application via TransUnion SmartMove ($40/applicant) — borrower pays
3. Screening criteria applied uniformly: 650+ credit, 3x rent income, no evictions 7 years, positive landlord ref
4. Lease execution via DocuSign, state-specific form
5. Security deposit + first month collected (ACH preferred, Zelle free)
6. Utility transfer documentation
7. Move-in inspection with signed condition report + photos
8. Welcome packet: rules, maintenance portal, emergency contacts, rent instructions

Rent collection

• ACH. Cheapest, most reliable. Tenant sets up automatic monthly.
• Zelle. Free, instant. Individual landlords only (not PM operations).
• Online portal (AppFolio, RentRedi). Credit card allowed (2.5–3% fee passed to tenant) or ACH. Tenant-preferred, reduces chase time.
• Late fees. 5% after grace period (3–5 days). State caps vary (TX 12% max, OR 5% max, etc.).
• NSF fee. $25–50 for returned checks. State caps apply.
• Collection. 5-day rule: send pay-or-quit on day 6 of late rent. Bigger problems start when you miss the legal clock.

Maintenance workflow

1. Tenant submits request via portal, photos required
2. Triage: emergency (same day), urgent (24-72 hr), routine (5-7 days)
3. Dispatch vendor with clear scope and budget cap
4. Vendor completes, invoices with photos
5. Tenant-caused damage charged back to tenant (documented)
6. Preventive maintenance scheduling:
   • HVAC biannual service (spring + fall)
   • Water heater anode rod every 3 years
   • Gutter clean 2x/year
   • Roof inspection annual
   • Smoke/CO detector batteries annually
   • Termite inspection annual (endemic regions)

Vendor network

Build a 3-deep bench in each trade:

• Plumber
• Electrician
• HVAC tech
• Handyman (general repair)
• Roofer
• Appliance repair
• Lawn/landscape
• Pest control
• Turnover cleaning
• Painter
• Carpet/flooring
• Locksmith

Three-deep lets you pick on availability and price. Primary, backup, emergency-only. Build by asking other landlords, contractors you’ve done rehab with, BiggerPockets local forums.

Owner reporting (PM to owner)

• Monthly P&L by property
• Cash distribution to owner account
• Portfolio-level summary with occupancy, collections, arrears
• Year-end 1099 to vendors, Schedule E package to owner
• Quarterly sit-down call or review (minimum)
• Major issue escalation protocol: over $500 cost, over 7-day vacancy, eviction filing

Hiring a PM company

• Licensing. Most states require PM license. Verify state real estate commission registration.
• E&O insurance. Errors and omissions minimum $1M. Request COI.
• Trust account separation. Client funds must be held separately from operating. State-regulated. Violation = license revocation.
• References. 3 current clients and 1 ex-client. Ask ex-clients why they left.
• Fee transparency. Request full fee schedule in writing. Watch for hidden charges (tech fees, admin fees, maintenance markup).
• Scope of services. What’s included in monthly fee vs. extra. Turnover work? Inspections? Legal coordination? Maintenance supervision?

Common pitfalls

• Self-manager burnout. 10–15 units is the burnout wall. Systems or PM required beyond that point.
• Bad PM skims maintenance. 15–20% markup on all vendors. Inflated invoices. Your $100k/year property costs effectively $8–12k/year extra. Annual audit of invoices recommended.
• Tenant-placement misalignment. PM earns leasing fee on each new tenant. Incentive to churn tenants. Counter with renewal bonuses or flat-rate PM contracts.
• Trust account violations. PM commingles client funds. Red flag. Walk.
• Inadequate screening. PM skips reference calls, takes first applicant. Higher eviction rate and turnover. Require written screening criteria.
• Code violation blind. PM doesn’t track city inspections, fire inspections, licensing. Fines accumulate. Require quarterly compliance review.
• Reserves not built. PM distributes 100% of cashflow. Capex bomb hits. No reserves. Require reserve build into contract.