How much should I charge to manage a student house?

I filled all ten in a month with good tenants. As the former owner of a much smaller building, I know just how hard this is and wanted to stress it. I don't think you are, but just in case: Don't sell your self short now doing a favor because you may grow to resent it later. It sounds like you have enough professional experience to realize this but since you asked, I'm bringing it up. My suggestion is to find a number you'd feel comfortable with (finder's fee + percentage) charging a non-friend, and then reduce it by whatever friendship discount you want. Let him know both numbers, just so he has an idea of what you're worth and what he's getting. I say this not as a dick move that will undercut your nice efforts but to keep lines of communication open and expectations set -- something I feel is incredibly important when doing business/professional favors for friends and family.

I don't think you should be looking for a full fee off 8-10% a month unless you have previous experience managing properties. Did you run background checks on the tenants? Do you have access / knowledge to start the eviction process if they start to default? Do you know what to do if something breaks? Are you preparing a monthly statement that handles all of the cash flow? Are you handing the payment of the renters each month? Will you be giving him the docs to help file his taxes at the end of the year? Do you know about the Rental Regs and tenant rights in your area? I'm not saying you don't but it sounded from your question that your just a friend helping a friend that might be too busy to help himself. On the same flip side, I wouldn't "give" my work or time away either. If he has rental properties hes "probably" not hurting for cash so any discount you give him over what you would charge a stranger should really be based on your friendship, not your perceived notice of his financial state. If if where you --- scratch that --- I am a Realtor, but if I were you and was NOT a Realtor ;). I'd charge him a flat % for finding the tenants (did you review the lease or did he?) and a small monthly % (2-4) fee for ongoing management. Of course all of this is based on some assumptions. If I was wrong, disregard and follow the more main stream advice here!

Obviously the rental market is different in the US than Australia, but typically here the agent charges the first week + 6% ongoing. If the agent also pays the council rates and water bill and then collects this money from the tenant the ongoing percentage would be something like 7%

jbenben - As I said, I have a fair amount of experience with student tenants from my own properties, so I'm not too worried that I don't know what I'm getting into. Your advice is helpful and well-taken, though. Thanks everyone for your info and suggestions. I feel like I have a much better basis for coming up with a number now. Much appreciated!

OK. I just noticed you were in Illinois. Info on management licensing requirements http://www.allpropertymanagement.com/propertylaw/property-management-law-in-illinois.html Basically, you may not advertise the property, lease vacancies, accept checks or deposit monies, etc., if you are not a licensed real estate agent. You can legally order up cleaning, repairs, and other maintenance without any sort of exam or license. (There is also a provision where you can get some sort of "leasing agent" license instead of a full r.e. agent's license. Maybe you can look into that? But whether you get the real estate license, or the leasing agent's... I think a fully licensed real estate broker has to be involved somehow.) I also did a little research on what a "student house" might be, because I was a little unfamiliar with the term. Do you mean a house shared among students, with bedrooms individually leased? If so, 10+ vacancies must be a big house/property. It seems super work-intensive to manage. I think the 8% to 10%-type estimates other folks gave you absolutely applied to the management of a building w/ individual apartments. In other words, I don't think those estimates are applicable to your situation. They seem low. Hey... There is one more important thing I wanted to mention.... If you are renting to college students, keep in mind you will also be dealing with their parents. I've rented to folks with over-protective parents. Nightmare. A bit like doubling or tripling the amount of demands and the amount of accountability regular property management usually entails. FYI. Overall, when I discuss proficiency with housing laws or being licensed, I am doing so because the probability you will need both if you manage this property is fairly high. I wish you good luck, and I hope my experience and advice have been helpful to you.

So sorry -- but I am shocked by some of the advice here. Property Management can be serious business, that is why there are so many laws governing landlord and tenant issues. You say the property is in a university area and your friend has been having trouble due to mismanagement? That is sort of a red flag for me, and I hope you proceed with caution. To quickly address your first two issues: #1 - Your friend should pay you a commission for each rental. You can start by asking him what he thinks is appropriate and negotiate from there. I like 1/2 a month's rent for each, but a round number like $200 or $300 per unit is good, too. If you want to be nice and allow him to pay in installments, go ahead. (Be warned -- by the time you finish reading all of my advice, you might not wish to charge him anything. That's ok, too;) #2 - Don't manage the building. Offer to be available for advice if he needs. It might not be legal for you to manage the building, anyway. See below. I will outline 3 major reasons for you to decline to manage this property. But trust me, I can name 100's of reasons. Hell, I can name $1000's.... A) The law and liability concerns might not be in your favor in this endeavor. Some http://www.allpropertymanagement.com/propertylaw/ or have other requirements if you manage a property but do not own it. Why? Among other reasons, there is potential for a tenant, a neighbor of the building, a contractor or plumber you engage to work on the property, or even your friend (the owner) to sue you as a result of your involvement in this property. You really want to know what you are doing when you administer a property with multiple dwellings. Even generally, you will be responsible for hiring skilled workers to perform repairs, keeping the property safe and legally habitable, adhering to discrimination laws concerning tenants, etc., etc., etc. If you really want to do this management thing, get educated and licensed to do the job -- or politely pass on the opportunity. B) As the manager, you will be "on-call" 24 hrs a day, 7 days per week. At first glance it seems easy to you, I can tell. But the truth is you will be administering the requests and concerns of an owner plus all tenants on a full-time basis. That is a HUGE commitment, especially for the amount of compensation you seem to be favoring from the suggestions provided in other answers, above. C) There is every possibility your friend isn't a good and responsible property owner or landlord. I suspect this might be the true source of past mismanagement issues, regardless of what you were told. Your friend owns an income property. He is having money issues. He is an adult and is ultimately responsible for his property and his predicament. Do you know if he is tight-fisted regarding repairs and payments for services rendered? Do you think your friend has good business judgement, generally speaking? Do you really want to put yourself in a position where you will have to find out?? Think about these questions, please. BONUS CONCERN: 10 vacancies seems very high. There will be heaps of repairs and concerns to be handled as the new tenants settle in. Do you think it seems reasonable to assume there has been a fair amount of irresponsibility surrounding this property? Are you sure you want to put yourself in a position of responsibility in middle of all that? ---------------- MY Bottom Line: Unless you are an owner and share in the rewards conferred by long-term successful maintenance of this property, I suggest you restrict future help to giving tips and advice. ----------------- I super applaud that you want to help a friend out. Truly! And I think you've done your friend a great favor by finding him decent tenants. Wish him well with the property and take his calls when he needs advice. Your state might not allow for you to engage in property management w/out some kind of license (real estate broker's or otherwise) and this alone might give you a polite reason to decline deeper involvement with this property. Good Luck.

I used a property management agency that charged 10 percent of the rent to manage. Make sure you promise to do regular walk-throughs, though -- my tenants painted the kitchen electric blue and silver and the property manager never told me a thing about it.

You might also consider a different finder's fee for those first 10 that you have completed, compared to what you will charge in the future. Since there was no agreement up front, maybe a steep discount is part of your 'favor' or 'friendship discount', but going forward, here's what the fee would be to find another tenant.

All great info and suggestion above, thank you! Crewshell, those are good questions. I actually have some experience managing my own properties, although I am not a professional property manager. I did do background checks, drafted leases and cosigning agreements, and unfortunately, I do know how to begin an eviction process. The reason he asked me for help is I'd been successful with my own rentals. I guess this puts me somewhat in between a professional and a friend helping out a friend.