Any property management firm will have maintenance and upkeep issues to deal with. But not all of them will choose to have their own handymen on staff as permanent employees. The decision depends on how busy they can keep the staff of repairmen and technicians.
The larger the property management firm, or the more revenue it grosses per month, the more likely it is for it to make sense for them to hire one or more full-time handymen. If they can keep a handyman busy with productive work for 40 hours per week, it’s a no-brainer, since having one’s own handyman on staff is generally less expensive than farming that much work out to independent contractors.
So what does it cost to hire a handyman?
As of May 2012, the median annual wage for a general maintenance and repair worker was $35,210. The bottom 10 percent of workers earned below $20,920, while the top general maintenance and repair workers earned more than $57,260, according to the United States Bureau of Labor Statistics. Employers have to figure benefits on top of that.
Property managers with over 50 full-time equivalents will have to provide health insurance to full-time handymen, so add about $10,000 in health care costs on top of that, along with FICA taxes, unemployment insurance tax and other odds and ends. It could cost well over $40-45 thousand to hire someone who makes $35 thousand per year.
So it’s clear that to keep someone on payroll, a property management firm charging 10 percent needs to be running a lot of residential units to break even on the expense of hiring their first full-time handyperson. Even then, there will be some specialized work, such as electrical or plumbing work, that will be beyond the capabilities of the firm’s full-time handyman or need a specialized license. And so they will still have to shell out for a professional contractor, occasionally, even if they have a handyman on staff.
Most smaller firms will elect to contract out handyman services and other maintenance projects where possible.
Note: For apartment buildings, the rent normally covers any estimated repair, renovation and maintenance costs. Condominium associations, though, should divide the expected costs up among the owners including both materials and labor, and assess a maintenance fee, with special assessments for any unexpected surprises.
If you are a property manager or do-it-yourself landlord and you are using contractors for about 20 or more hours per week, however, it may soon be time to take the plunge and hire a handyman of your own – at least part-time. That part-time worker can be easily scaled up, in most cases, as your company grows.
|Author Bio Writing about personal finance and investments since 1999, Jason Van Steenwyk started as a reporter with Mutual Funds Magazine and served as editor of Investors’ Digest. He now publishes feature articles in many publications including Annuity Selling Guide, Bankrate.com, and more.|