Operating expenses
Management Fee
Property management cost as % of collected rent. Typical PM fees: 8-10%. Set to 0 if you self-manage.
Why Management Fee matters
Always include 8-10% management in your underwrite even if you plan to self-manage. Why? Your time has cost. AND if you ever sell or hand off the property, the next owner will need PM in the model. A deal that only works at 0% management is a fragile deal.
Related terms
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