Property management venture?
Trying to pro-forma a property management venture... any input on opex for the array of operational and administrative obligations to be performed for any given client? Anyone in the Boston market know Where mfees are at on small to mid market multifamily retail or mixed ? Are leasing obligations baked into that fee? 
[{"id": "cpv33z6", "text": "If you want people to help you you need to explain your questions a bit more clearly.  You want time? Take the time.", "replies": [], "depth": 1}, {"id": "cpv56f6", "text": "What industry? Seriously provide more detail. ", "replies": [], "depth": 1}, {"id": "cpvi8cw", "text": "Sorry for the lack of detail fellas, its a pretty straightforward inquiry that would probably be best understood by those closely involved in the business. \n\n1) How granular do you find yourself projecting the operating costs of performing responsibilities under the management agreement to determine feasibility? Down to the postage?\n\n2) Where do you see management fee's in the Greater Boston Area? Specifically, I quote.... \"small to mid market multifamily retail or mixed(use)\". Let's assume that the management contract includes all various maintenance, administration and marketing responsibilities of a building. ", "replies": [{"id": "cpw0zal", "text": "which opex's are you referring to?  A lot of that gets billed back (yes even down to postage).  \n\nI've never seen anyone not bill back maintenance.  That would be crazy.", "replies": [{"id": "cqbytt4", "text": "Thanks, I guess with the concept of a bill back I need to rephrase my question. \n\nI am trying to determine the feasibility of a few property management assignments that have come up. I hear from many people that there is very little money in property management. How would you guys assess the profitability of a management contract? ", "replies": [{"id": "cqkb3t0", "text": "I'm not a property manager, but I am a commercial property accountant. So I'll do my best, but I may not have what you want.\n\n&gt;1) How granular do you find yourself projecting the operating costs of performing responsibilities under the management agreement to determine feasibility? Down to the postage?\n\nAs a manager, you typically don't really have operating costs besides your salary. The building and its rental income should pay for postage/property taxes/landscaping/janitorial/etc. \n\nIf you are projecting expenses because you are worried about budgeting, everything comes from (1) last year's expenses, (2) your knowledge of the market, tenants, and building, (3) your experience. It's really difficult to be super accurate. For example, say your property was 75% occupied last July, and the electric bill was $6000. This coming July, you project your occupancy to be only 60%, so you budget less for electric, right? Blam, unpredictable heat wave and you actually have to pay $7000. It's just hard to do accurately sometimes.\n\n&gt; How would you guys assess the profitability of a management contract?\n\nFor a mom and pop PM company, I'd just take your management fee, subtract your own business' costs (your salary, mostly), and that's your profit.  Pretty much everything else involved with managing the building can be paid for by the building. No reason why the manager should be paying for expenses incurred by the building. See below answer for \"determining profitability\"....\n\n&gt;) Where do you see management fee's in the Greater Boston Area? Specifically, I quote.... \"small to mid market multifamily retail or mixed(use)\". Let's assume that the management contract includes all various maintenance, administration and marketing responsibilities of a building.\n\nCouldn't tell you this one. All properties and markets are different, and I'm on the west coast. It's fairly typical to assess a management fee based on a property's gross revenue for a given month. This gives you (as the PM) incentive to keep tenants paying their rent. There is also usually a \"minimum fee\" in case tenants decide not to pay their rent for whatever reason in a given month. I have seen everywhere from 1% to 20% mgmt. fee, because it depends on a lot of factors that are really above my pay-grade: what is the occupancy of the building? what is the projected occupancy of the building? How many tenants are in the building? Are the leases above or below market rates? How would BOMA grade the building (A, B, C)? Is the PM company also assuming brokerage responsibilities? What kinds of companies are holding leases (you can charge McDonald's more than you could charge Jake's Burger-stand), etc. etc. etc. \n\n&gt;Are leasing obligations baked into that fee?\n\nNever that I've ever seen. Leasing is almost always done on commission basis in this field.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]