hiring an on-site community manager

[Art Abrams]

I am about to purchase my first mobile home park, an older, fully occupied 66 lot park in Bradenton, Fl. Presently, there is an on-site manager who seems to be very competent, however, in my opinion he is way overpaid considering the number of hours on average that he works. He receives free rent($215), free electricity($60), and a salary of $1050 per month. For this he attends the office 2 hours per day, M-F, and does lot mowing, sewer clog cleanouts, and all general maintenance. My estimate is a total of 15 to 20 hours total time per week -- on average. Would I be out of line to think a fair wage would be $7 or 8 per hour?

Here's my question. I'd like to keep this individual as an employee, but I would have to cut his wage. How can I present the new terms to him without getting him so upset and disgusted that he quits? Failing that, how do I go about finding a replacement manager? Perhaps you have written an article on this, but I didn't see it at the website. I think it would be a good topic for an article. Any advice/suggestions would be appreciated.

Artie

[glinke]

Art:

I don't own or manage a MH park, but I do own more than one piece of real estate. Our lawn service bills us at $30.00 / hr. The last time we called a plumber, it was $100+ - even more on the weekend. I am a bookkeeper and I charge $30/hr. I'm sure that professional painters, etc. don't come cheap either. Your residents must like the manager or you would be looking to fire him.

It seems to me that you ought consider yourself lucky to have someone who does a good job (day or night) for only $1325/month! That's $20.08 per lot per month.

Not to mention that you may or may not be paying your half of FICA and Medicare on his rent and electricity!

As we say in Texas, "Some people would complain if you hung 'em with a new rope!".

Just my $.02 worth.

Gayle

[Barbie]

Artie:
I am interested in seeing what Chirssy's response is. I am a community manager and we (husband & wife team) do both 100% of the management work (admin, book-keeping, tenant issues etc) sales, plus on site maintenace similar to what you have mentioned. I would agree with you based on your community size and his hours the guy is over paid. Chrissy did answer one post in Jan. 2002 (see old messages) about management rates. She quoted a average of 7.00 mos per lot. This is strictly for management. (define management???) I do think maintenace type work is different and a rate also needs to be considered. Try breaking down the type of work he dose for you in addition to the hours he actually works in any given week.

I would have to disagree with Gayle and her comments. Lawns service companies, plumbers and bookkeppers are "contractors" they have other expenses (ie Equipment, gas, insurance, office expense etc) these things are part of what makes up their rate. If this guy is doing maintenance and using all community equipment, you are paying for the gas/desiel insurance etc. A fair hourly rate is what should be worked out for his maintenance work and hours. I'm sure he is worth more than minimum wage if you evaluate his skills.

As for presenting new terms to this individual again I would like to see Chrissy's answer. What ever you present will have to be done tackfully and in a positive away and you are going to have to hope the indivdual is a positive individual that can except change. No everyone deals with change in a positive way. Yet change is good.

[chrissy]

As always, this question generates a lot of interest and conversation. There are a lot of issues to consider in this situation. Here are some items - not in any particular order of importance.

Florida is one of the most heavily regulated states in the nation. To have someone in charge of a community that understands Chapter 723 is an asset. However, there are attorneys and the state association, both of whom can help should you have someone who does not.

The amount you have set forth in dollars represents about $1325 per month, plus payroll load on $1050 (FICA and related labor taxes and costs). You estimate 15-20 hours per week. You neglect, however, to discuss some specifics. Is this community on septic tanks? If so, sewer clog cleanouts can take tremendous amounts of time. How much common area is there to mow in addition to all the homesites? Does he also do maintenance on the equipment owned by the community? Such as oil changes on a vehicle, sharpening blades and oil changes on mowers, which also take time on an irregular basis. During the first of the month when rent comes in, is he also out there mowing grass? If so, this might well go over the 15 - 20 hours a week.

Documentation is of key importance, especially in Florida. This also takes time to write the proper notices for everyone. If this is a 55+ community, your manager may also have quite a bit of time taken up with abandoned homes for which heirs have to be tracked down, and homes disposed or or titles located. If this is a community with obsolete homesites, your manager may also spend quite a bit of time trying to find smaller homes to replace those that are pulled.

Now, all of that said, please realize that EVERY decision you make in a community is financial. If the numbers won't support the wages the manager currently receives, you have no choice. Look at the overall budget and decide how much the budget will support for management costs. Understand that if you want the privilege of being an absentee owner, you will pay for that privilege by having a more highly competent manager onsite. For less money, you can be more of a hands-on manager.

Perhaps the best way to break the lower wage to the current manager, if you decide that is what you must do, is to tell the seller that you will be under no obligation to honor any current employment contracts. Then, ask the current manager to apply with you if he wants to keep that position. Or, bring in management of your own to see if it works to your advantage. Sometimes, with the higher cost of acquisition, you cannot support the same level of expenses as a current owner who has less expenses.