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Can I hire a team to run my PadSplits?

Last updated June 4, 2021

Below, please find three common models to consider as you structure your arrangements:

Description

Manager charges a either a flat fee or fixed percentage of revenue monthly (usually 8-15%)

Manager and owner split net operating income (either favoring the owner or 50/50 after an initial hurdle is cleared)

Manager pays owner a fixed monthly rent, and keeps all revenue generated by the property

Pros

Simple to explain, follows traditional fee model, most upside for owner

Best alignment of incentives between manager and owner

Simplest to set up, administer, and explain to owner. Most upside for manager.

Cons

Doesn’t align incentives between owner and manager on maintenance and utility consumption

Most complicated to explain and keep books. 

Most risk for manager if things don’t go well. Leasehold improvements must usually come from manager

Great for...

Owners who are sold on the PadSplit concept

Owners who want managers to control costs

Experienced managers who really understand their profit drivers

 

 

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