Investor · Niagara Falls, Ontario · Member since 2016 · 80 posts · 24 votes
HI BP. I've been presented with an opportunity to manage 1 to 4 single family homes in my home town. What do you think a fair price would be? I've been asked to collect rent, manage contractors, rent apartments etc. Its a pretty good fit since I'm already set up for my own properties. Any input would be greatly appreciated. thank you in advance for your help. Cheers!!
If memory serves me correctly I remember the board changing their guidelines to reflect that ruling in 2013. I am fairly certain I read about that change. You may represent yourself as the landlord, hire a paralegal or have a family member represent you (with a letter of authorisation).
In Toronto, the rate is roughly 10% per month of gross rents + 1 month lease up fee. For high rent properties ($2000+ in rents), the rate tends to max out at $200 a month. You can find property managers here who are also willing to work on a fixed pricing structure.
@Ming Lim thanks for your reply. I find the percentage structure as expensive especially for units the are mostly brand new. The rent for more and need less attention. Percentage would make more sense for older units. What does the fixed pricing structure look like? Does it include attending the LTB and maintenance calls. Any details would be a great help. Being a landlord myself understand how much work is involved. Having an investor spend too much would definetely scare them off.
Around here most SFRs rent for $1200 - $1800/month, so while 10% seems pricey to the owner, it's really not a lot for the property manager.
We are not in the business of managing properties other than our own, but occasionally we will look after a property adjacent to one of our own or one in the neighbourhood for a friends/acquaintance. In these instances we charge a flat rate of $100/mth for a SFR - that covers collecting rents & paying bills, ensuring services are delivered, monitoring the property and the occasional simple/light maintenance.
@Roy N. thanks Roy. I've been on BP a short period of time. I've already learned to respect your advice. Your a great help to the BP community. What about evictions and leasing?
Remember that the fixed noted above ($100/mth for an SFR) is out looking after properties more as a favour than a business ... sometimes we will also do this for a landlord where we have an interest in acquiring the property (kind of like a test drive).
If you are planning to manage properties as a business, you will want to be looking at 8 - 10% of gross revenue to make a go of it.
Check around your area. Many property management companies charge 8-10% (5-7% if you have enough unit density) for the on-going management. Repairs and renovations will be extra (and are frequently marked up). Many also charge 1/2 - 1 months rent as a "lease-up" fee when they secure a new tenant (this can be seen to encourage turn and can be at odds with the owner) and some charge a "renewal fee" when a tenant renews their lease term.
@Steven B. - Property management that charges fix rates are typically around $150-$175 in Toronto plus a 1 month lease up fee. This includes all the basics. Renting out and advertising units, paying bills, answering tenants and checking on the property. As Roy mentioned repairs and renovations are extra, but they will coordinate to ensure it's completed. If I were you, I'd call around and get quotes from local property managers as this, I find, to be quite local. A Waterloo student rental for example, has higher monthly rates, but lower lease up fees.
@Steven B., one important consideration is that you cannot legally receive a fee for representing a landlord at the LTB. In order to do that, you need a LSUC number, which means you need to be a paralegal or a lawyer. Even if they hire you for general management services, they will need to hire a paralegal or represent themselves at the LTB. Ontario law can be frustrating.
In terms of general fees, I agree with everyone else here: 10% of gross rents + a 1 month lease-up fee. We sometimes do a lease-up for less than that when we know it will be an easy unit to fill.
@Jon Kepler that's interesting I'll have to look into that. I've been representing our company at the LTB for years. Our supers have also been representing the company.
@Jon Kepler that's news to me. Can you please reference where it is written that we can't rep a landlord at LTB? I was under the impression that this was standard practice.
@Steven B. If the landlord is a corporation that you work for in some significant capacity, I think you're fine. I called the board once to inquire about details. I asked if there was a difference between a corporation's employee and a corporation's contractor. They didn't care. So, if you can prove your association with the corporation, I think you're covered. The problem is when a property manager with many clients tries to represent several of them.
(I got the link above from the following blog post: http://ontariolandlordandtenantlaw.blogspot.ca/2013/05/can-property-manager-represent-landlord.html)
If memory serves me correctly I remember the board changing their guidelines to reflect that ruling in 2013. I am fairly certain I read about that change. You may represent yourself as the landlord, hire a paralegal or have a family member represent you (with a letter of authorisation).
@Thomas S., it seems to me that this might actually be a good reason to incorporate. If your corporation sends an employee or contractor, the corporation is effectively representing itself. However, if you operate in your personal name, the only way to self-represent is to literally show up yourself.
10% looks higher to me. I think it's more of a 5% from what I have heard in Ottawa.
That will likely depend on your unit density and clientele. We recently danced on an 84-unit complex where the quoted management rate for the property - once stabilized - was 5%. I cannot imagine any PM managing properties for a living looking after a residential (1-4 unit) property for less than 8 - 10%.
Agree with you here @Roy N. It also comes down to area you are dealing with. in Ottawa centre town, you are able to attract good tenants so work is less demanding