When it comes to property managers, there are many to choose from in the Greater Toronto Area. Different property owners have different needs depending on multiple factors, like the type of rental property or real estate, how many properties they own, and whether they are single-family homes or multi-unit properties.
Thus, you may want to consider multiple candidates before making a choice, especially if you are looking for a new property manager because you haven’t be getting what you need from your current property management company.
So how do you know if you need a new property manager? Here are some tips to help you find the perfect property manager in Toronto for your needs.
Steps Before Changing Property Management Companies in GTA
Before you look for a new property manager, you should take steps to prepare your residential and commercial properties for the transition.
Here are some of the things you should do before you start to interview candidates for your current property manager.
Talk to your Property Management Company
First, you should evaluate your current property manager. Every property management team is different. Some specialize in residential properties, while others focus more on commercial.
However, other differences may not be so black and white. It may simply be a matter of managing the relationship.
The best property management company is one that will work closely with you, find the best tenants, and provide all the services you need.
Every landlord should track their property manager’s work. A professional property management company uses property management software to track the many rental properties they cover as they fill vacancies, handle maintenance requests and more.
This software will make it easy for you to check their progress in locating potential tenants and overseeing all your properties.
Identify Challenges With Your Current Management Company
The only way to avoid repeating the problems with your current property management firm is to identify those problems and then find a company that provides the exact services you need and the best value for the money.
Good Property Management Company Roles & Responsibilities
If you’re a property owner looking for management services, you’ll need an experienced manager who can perform all these duties:
Handle Legal Issues
The right property manager can deal with bad tenants in a professional manner and move forward with an eviction when necessary. They will also be able to manage other legal matters if any arise.
Vet the Tenants
Smaller and larger companies might have different ways of screening tenants, but both should run background checks. Every tenant isn’t right for every property, so finding tenants is more of an art than a science.
Repairs & Maintenance
Being able to manage repairs and maintenance requests is another important part of the professional services property managers should provide.
The best property management companies will collect the first month’s rent when accepting new tenants. Every tenant should also be able to stop into their office to drop off a rent check every month as well. Property management companies will use property management software to track rent payments.
Deal with Tenant Issues
Sometimes a tenant will cause problems for other tenants, so a property manager should be able to deal with those issues.
The organization is a critical part of property management services. When you’re running a rental business, you should always be able to determine where everything stands.
A property management company should be able to swiftly fill vacancies by running background checks on every prospective tenant. They should understand that every property is an investment property and that the longer they remain empty, the more money the real estate investor is losing.
Handle All Documentation
Property managers should have a real estate broker’s license and know-how to handle all the documents required for renting out an investment property.
Access to Trusted Vendors
The right property manager should have connections with all types of service providers related to managing rental properties. Real estate investors often need to perform capital improvements to make the property fit for tenants, and property managers should have the connections to make that happen.
Property management firms know how to find all the tax deductions a real estate investor would qualify for.
What to Look for in a Property Management Company in Toronto
Finding a good property manager will require you to interview multiple candidates. Property managers should provide all the services their clients need and check off these boxes as well:
The property manager you need is the one who has experience managing the kinds of real estate you own, whether that’s single-family homes, multi-unit properties, or commercial real estate.
Licenses and Certifications
The property manager you select should hold all the proper licenses and certifications needed to run a real estate business and manage property.
The best property management company also has an excellent reputation, not only with property owners but with tenants as well.
A property owner should also consider some essential quantitative data like vacancy rates. This puts some hard numbers down to quantify just how good their services are and how well they manage investment property.
Quality of Customer Service
The right property management company should provide the highest-quality services. Clients and tenants alike should be able to have a great relationship with their property manager.
5 Reasons Why it’s Time to Switch Property Management Companies
Every landlord probably wonders from time to time whether it’s time to start looking for another property management company to manage their rental property in Toronto. However, it’s difficult to know whether you really need to consider other property managers. Here are some of the top reasons property owners might want to switch.
Slow Response Time
A property manager’s response time is critical, whether they are dealing with their clients or their clients’ tenants. A property manager who is too slow in responding to tenants’ needs could lead to a high turnover rate. On the other hand, a property manager who is slow in collecting rent threatens a property owner’s business, while one who is slow in handling maintenance puts their investment at risk.
A High Turnover Rate
A property manager in Oakville who is skilled at finding the right tenants will typically have a lower turnover rate than one who just fills units with whoever comes along. The key is to find a tenant who will be happy with the property from the moment they move in. Property managers also must be attentive to their needs. Failure to do either of these two things will result in a high turnover rate.
A property management company should plan regular maintenance to keep everything in the rental property up to date. Not only does this keep the unit in good condition, protecting the owner’s investment, but it also keeps the renters happy because they aren’t constantly dealing with broken appliances or other issues.
There should be no question about the management fees charged by the property management company. Owning rental property is a business, and you should always know what the management fee is for every service offered.
Finally, a property manager should understand that renting out property is a business and that owners are investors who are paying for their expertise. A property manager who gives bad advice isn’t worth their fees. If something didn’t turn out the way you wanted it to, it’s likely that you received bad advice.
Frequent Mistakes During the Transition
1. Not reading the agreement you have with your old property management in advance. Many owners try to change their property manager in the middle of a contract. The key is to make this change after the contract ends and before signing a new one. Another option is to make the change if the previous manager is in breach of contract, which enables you to get out free and clear.
2. Springing your plan on your old property manager at the last second. This can create problems with the old manager, especially if they have a tendency toward unprofessional behavior. Give them notice of your plan to terminate their contract in writing 30 days before it ends.
3. Not putting the old property management firm in touch with your new manager. Your new company can make the transition easy, but only if you connect them with your old property management company.
4. Not demanding all the required documentation. The previous property manager should provide the contact information of the current tenant, their lease, move-in documentation, tenant ledgers, keys, the security deposit, and the application submitted by the tenant.
5. Not considering the proper timing. A problematic and unprofessional property manager will not be in a hurry to turn over the keys and documentation on your units. However, your new property management company should be able to handle the transition and get legal assistance if needed.
How Do You Determine if Your Property Managers Are Doing a Good Job?
If you don’t have a good working relationship with your property management company, there’s a good chance they aren’t doing a good job. They should always ensure that every tenant pays their rent on time, and they should not only take care of your needs but also the needs of your renters.
A property management company that’s doing a good job should always be on top of everything you need, even anticipating your needs and the needs of your renters.
There should never be any question about whether they are behaving ethically and in your best interest. You should always be able to approach them and ask question if there’s anything that they aren’t doing even though you think they should. They should be receptive and responsive to your concerns and address them in a timely fashion.
A property management company in Oshawa that always provides all the services you need without complaint and is always open to feedback is worth keeping around.
What Percentage Do Most Property Management Companies Charge?
A typical property management company usually charges a monthly fee amounting to between 8% and 12% of however much they collect in rent payments for you every month.
On the other hand, a property management company will usually charge a fixed fee on any units that are sitting empty. Some managers charge a fee that would be equivalent to the amount of rent they would normally expect to charge on the unit.
It’s important to realize that even if a unit is sitting empty, it doesn’t mean that the manager isn’t doing anything. Sometimes empty units require improvements, which the manager will handle. They will also have to do some work to locate prospective renters and then conduct screening to find the right one for the empty unit. In some cases, empty units require more work from a property manager than occupied units.
Not all property managers charge a percentage of the rental payments. Some have a fixed fee structure, with the fixed amount usually based on the type of property, square footage, and kinds of services provided.
What Are Some Common Hidden Fees a Property Management Company Might Charge?
Whenever you’re paying for a service like property management, you will also find that some charge additional expenses that you didn’t know about when you signed the contract. It’s important to ask lots of questions about their fee charges and these potentially hidden fees.
Some common hidden fees charged by a property manager include sales commissions, cancellation fees, and eviction fees. So-called “low-cost” firms are the worst offenders in this area.
Firms that aren’t actually in the business of managing properties will offer such services just to get you in the door. Then they will perform a bait and switch by trying to convince you to sell your property so that they can earn a sales commission on it, which is sometimes more than they would make managing it.
Some firms bury a statement about a cancellation fee deep in their contract. They typically charge this fee if you try to cancel the contract within a particular amount of time.
Finally, good firms will do what they can to retain all the best renters, but those that charge an eviction fee will be more interested in evicting renters than trying to keep them. This can be damaging to your reputation, your business, and your bottom line.
When speaking to a new client, a property management company in Toronto will often say all the right things, but it takes wisdom and due diligence to read through the lines in everything they say. With a little bit of work, you can find a property manager who will serve you well and grow your income.